Novelis sees aluminum sales to Audi, Ford tripling on new rules

Mumbai: Novelis Inc, the world’s biggest supplier of aluminum sheets to carmakers, expects sales to customers including Audi AG and Ford Motor Co. to rise almost three-fold as new emissions rules restrict the use of steel.
Shipments of automotive aluminum may climb to as much as 25% of total sales by 2020 from the current 9% of 3 million metric tonnes, Novelis vice chairman Debnarayan Bhattacharya said on Thursday in an interview in Mumbai. “The share of beverage cans, which are less profitable, will fall to 50% from about 60%.”
“The overall pie is growing and still the share of automotive sales will jump,” said Bhattacharya, who is also the managing director of Novelis parent Hindalco Industries Ltd. “We’ve started supplying to Ford for their F-150.”
The F-150 pickup is one of Ford’s popular models.
Hindalco, owned by billionaire Kumar Mangalam Birla, is betting regulations to cut carbon emissions and improve fuel efficiency in the US and Europe will prompt carmakers to use more aluminum. Ford dealers last month started taking orders for its new aluminum-bodied F-series, while Jaguar Land Rover Ltd. is building a mid-size sports sedan on an aluminum platform that will go on sale next year.
Lighter parts
Rules in Europe will require automobile producers to switch to lighter car parts and frames, according to the EU’s website. The regulations will cut average carbon-dioxide emissions from new vans sold in the EU by 14%.
Global aluminum-sheet use in auto bodies will climb five- fold to 1.8 million tonnes by 2020 as manufacturers seek lightweight material to improve fuel economy, Derek Prichett, a vice president of global recycling at Atlanta-based Novelis, said on 10 June.
Separately, Hindalco, India’s second-largest aluminum producer, may miss its target of producing a record 1 million tonnes of the metal following power outages caused by floods at its smelter complex at Hirakud in the eastern state of Odisha, Bhattacharya said. The plant, which has a capacity of 213,000 tonnes, has been running at 60% use this month, he said.
Hindalco shares fell 1.4% to Rs.177.90 at the close in Mumbai. The stock has climbed 45% this year, compared with a 25% gain in the key S&P BSE Sensex.

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