The global automotive AHSS (advanced high-strength steel) market is expected to register a CAGR of over 9.5% during the forecast period, 2020 - 2025.

Automakers are continuously focusing and working on technologies that can reduce the overall weight of the vehicle, as a result of which, automakers have become very selective about the material that they use in the vehicle. According to the Steel Market Development Institute (SMDI), new grades of steel are bound to play a significant role in vehicles, in the future. The advanced high-strength steel (AHSS) significantly outperforms the competing materials, for current and future automotive applications.

The automakers are using AHSS for some of their models, as a part of their ongoing drive to build lighter vehicles that are more fuel-efficient, without compromising on safety. For example, Chevrolet, Kia, and Volkswagen are using AHSS in their cars. On an average, an AHSS chassis can be 15% lighter than conventional steel, although it costs up to 35% more to produce, than traditional automotive steel. Volkswagen has included AHSS in its seventh generation Golf, and it has reduced the Golf’s fuel consumption and CO2 emissions by around 23%.

Key Market Trends

Stringent Fuel Economy Norms to Drive the Development of AHSS

According to the Steel Recycling Institute (SRI), a recent study analyzed the importance of material production emissions in a vehicle’s lifetime environmental impact. According to that study, the AHSS-intensive vehicles had lower life cycle emissions than aluminum-intensive vehicles, for every class of vehicles tested, such as sedans, trucks, SUVs, and alternative power train vehicles.

New grades of AHSS enable automakers to reduce vehicle weight by 25%-39%, as compared to conventional steel. The AHSS system reduces the overall weight of the vehicle by 170 kg to 270 kg, which corresponds to a lifetime saving of 3 to 4.5 metric ton of greenhouse gases, over the vehicle’s total life cycle. This saving in emissions represents more than the total amount of CO2 emitted during the production of all the steel in the vehicle.

Due to the growing environmental concerns, caused by the rising exhaust emissions, countries across the world have been significantly focusing on tackling vehicle emissions. For instance, the United States is one of the major countries where the government, with the help of both departments, namely, the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), has implemented vehicle emission standards.

Over the period of 2012-2016, automakers were successful in meeting the emission standards set under the EPA’s Green House Gases (GHG) program, in the US automotive industry. However, after 2016, a few vehicle models exceeded the limit of the emission level, as fuel consumption increased with the growing, advanced technology in the vehicles, since the number of components in the vehicles increased with the adoption of new technologies that lacked optimum energy consumption features.

Thus, the manufacturers across the world have geared up again, to limit their current GHG emission levels, by optimizing their vehicle designs through materials, such as AHSS.

Germany - Expected to be the Largest Market in Europe

Europe is anticipated to dominate the AHSS market till 2025. The high-revenue market value can be attributed to the presence of major automobile manufacturers and OEMs in the region. Recovery of the automobile sector, post the recession period, across the region, will further support the regional growth. Within the European region, Germany is one of the prominent markets for AHSS in automobiles. The country is the largest steel producer in the EU28, having registered an annual production of approximately 42.4 million metric ton of crude steel in 2018. Germany is one of the fastest growing European countries, even in the electric vehicles market. According to IEA, in 2017, Germany had registered nearly 54.56 thousand units of electric vehicle (EV) sales (including battery electric vehicle (BEV) and plug-in-hybrid vehicles (PHEV)), with an increase of 121% from its 2016 EV sales. Future applications of AHHS in these electric vehicles is also expected to drive the market.

Competitive Landscape

The major companies in the automotive AHSS market include ArcelorMittal SA, ThyssenKrupp AG, SSAB AB, Kobe Steel Ltd, and AK Steel Holding Corporation. Most of the steel companies are now investing heavily in AHSS. For instance, ArcelorMittal SA is developing a third-generation, advanced high-strength steel, known as HF1050; HF stands for highly formable. Its versatility factor comes with weight savings of between 10% and 20%, in the vehicle parts.

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