The importance of bringing automotive steel to global markets
Posted on 09.09.15 by
Carmakers worldwide have come to expect access to the same products and solutions across all their global production facilities. The result: the pressure has never been greater for suppliers to prove that their global reach, integrated supply chains and expertise has what it takes to deliver automakers the products they need, wherever they are in the world.
Here, in the third post on ArcelorMittal’s automotive strategy, Brian Aranha, Head of Global automotive and commercial coordination, explains our approach to serving the global automotive market – and why it’s so important.
One of the key challenges we face as a supplier to the automotive industry is making sure existing products and solutions are available wherever we have automotive production facilities. It’s a challenge we’re meeting through a two-pronged approach: further strengthening our global footprint, and pioneering next-generation steels for the automotive industry.
At Arcelor Mittal, we have made extensive capital investments to allow us to pioneer next-generation steels, and to make our products and solutions available wherever we have automotive production facilities. As an example of our service leadership, we last year invested around US$15m in the production of advanced high-strength automotive steel at our Vega do Sul flat steel rolling mill in southern Brazil. Why? To enable it to locally produce our pioneering Usibor® steel in response to local need. Usibor® allows manufacturers to create lighter, safer and more environmentally-friendly vehicles at an affordable cost and has been imported from ArcelorMittal plants in Europe to Brazil since 2012.
Our investment in ArcelorMittal Vega do Sul confirms our commitment to Brazil as a key market for the automotive industry. By locally producing Usibor® we help carmakers in Brazil and beyond to address their primary technological and geographical challenges. This includes ensuring our pioneering lightweight products are available globally. But it also includes continuously working on next-generation steels to make cars lighter and more fuel-efficient – at an affordable cost, and without compromising safety.
Looking at Europe, our €9 million investment in ArcelorMittal Sagunto will enable the production of aluminium-silicon coated Usibor® Alusi and increase group capacity by adapting the hot dip galvanizing line in order to better serve the Southern European automotive market. The project will allow us to meet growing demand for innovative coatings required by the Southern European automotive market.
Another example in Europe on how we are serving our customers with innovative steel products and solutions through our network is our investment in ArcelorMittal Gent. Our Gent facility is undergoing a €140 million transformation to enable the mill to produce Fortiform®, a new range of advanced high strength steels (AHSS) for cold forming.
Our acquisition in February 2014 of AM/NS Calvert in partnership with Nippon Steel & Sumitomo Metals Corporation (NSSMC) is well-positioned to supply the growing demand in south-eastern USA and Mexico, providing steel grades that meet the 2025 safety and fuel economy targets. The site is on track to reach full capacity optimisation by 2016-2017. In Q1 2015 the investment in the existing no.4 continuous coating line was completed, which increases our North American capacity to produce press hardenable steels, one of the strongest steels used in automotive applications, Usibor®. AM/NS Calvert will also be capable of producing Ductibor®, an energy-absorbing high strength steel grade designed specifically to complement Usibor® and offer ductility benefits to customers. Another project at AM/NS Calvert is expected to be completed in 2H 2016, which is the slab yard expansion to increase Calvert’s slab staging capacity and efficiency.
In addition to investing in our existing assets, we have also been expanding our footprint, most notably in China, where we have opened a state-of-the-art automotive steel focussed production facility called VAMA, in joint venture with Valin Steel, and potentially in India, where we have signed a MoU with SAIL to explore the potential of developing an automotive steel presence. I will expand on these subjects in my next blog in this series.
With many carmakers now developing global platforms as a basis for their vehicles, co-engineering support is key. At ArcelorMittal, we have first-hand experience of this under-the-bonnet collaboration. After all, we were the first steelmaker in the word to start early vendor involvement programs and to embed a resident engineer with an automotive customer.
Today, our resident engineers are located in the design centres of almost every major carmaker in the world. These engineers are helping to ensure our customers know how to make use of our latest advanced steel solutions to make cars lighter and safer at the most affordable cost. Mike Sweers, chief engineer for Toyota’s North American truck division: ‘If you are designing properly for the material, you can achieve the proper weight savings. If you just try to make the mass reduction purely by material itself, you’ll reduce weight but you won’t optimise it. It all really starts with design.”
But our unique co-engineering approach is not the only attraction. Our extensive offer of automotive steel grades and our worldwide footprint are important reasons why OEMs (original equipment manufacturers) come to us for our support in developing their new vehicles. We work with car makers throughout the process and support car makers’ vision and strategy through strong global partnerships.
And this approach is paying off. For the second consecutive year, ArcelorMittal has been recognised with General Motors’ “Supplier of the Year” award. According to General Motors, this award is reserved for suppliers who have gone above and beyond its requirements. In the words of Steve Kiefer, vice president of global purchasing and supply chain at General Motors, the company needs suppliers like ArcelorMittal “to continue to bring us their most innovative technologies and highest-quality services and work.”
Our technology leadership is being recognised by our customers. In NAFTA, 11 out of 12 customers ranked ArcelorMittal the #1 supplier on technology leadership, whilst in Europe, 11 out of 14 customers considers ArcelorMittal the technology leader of the steel industry. Another testament of this recognition is last year’s American Metal Market’s Best Innovation Process Award for our Honda door ring.
These are just a few examples how we strive to supply our global customers with the steels they require. Working in close proximity with our customers, we’re pioneering tomorrow’s steel grades and solutions for lighter, safer, cleaner, vehicles.
By Brian Aranha, head of global automotive and commercial coordination
Want to know more?
> Find out more about our automotive offering
> Find out more about our co-engineering approach
> Watch the ‘Driving advanced steel solutions’ video
> Catch-up on other posts in this series: Developing our automotive footprint to capture demand growth and True or false: the steel industry is innovating faster than the mobile phone industry?