Brazil’s automotive industry, a major consumer of steel, is currently operating at 46 percent its total capacity, which is estimated at 5 million units/year, according to a top executive at the Fiat Chrysler group.
Talking to the participants of the Alacero conference, Latin America’s major steel event, held in Rio, Brazil, from October 25-26, Antonio Sergio Martins Mello, director of institutional relations at the Fiat Chrysler group (FCA), forecast the local automotive market to reach 3 million units by 2020.
The executive said one of the solutions to help the struggling automotive segment retake its growth is the export market.
“We don’t have other alternative for Brazil’s automotive industry to keep itself competitive than exporting. We need to be more aggressive. We need to not only seek the Latin American markets, but the global markets. I know it’s difficult and complex, but we can’t have a market of 4 million units when you have a global market of 90 million units,” he said, while comparing the global automotive market size with what Brazil could reach in terms of domestic demand in a desired scenario.
Looking specifically at the steel local steelmakers provide, Martins Mello forecast what he thinks is going to be the future for the automotive industry requiring steel products to manufacture their vehicles.
“In 2010, low strength steel (LSS) accounted for 60 percent of the steel used at the FCA platforms,” he said.
“We forecast LSS to account for just 13 percent of the steel we’ll use by 2019, as opposed to a share of 53 percent of high strength steel products (HSS) and 27 percent of advan¬ced high strength steel (AHSS),” he said.
The FCA executive also mentioned several technology gaps the steel industry could address. “This is what our engineers say: we’ll demand materials [and steel] with less thickness and higher width.”
According to Martins Mello, the industry also needs “tailor welded blank” technology. In other words, it needs new types of steel that can “reduce thicknesses,” while keeping the material stamping proprieties. Steel for hot stamping (PHS) is also required, as the industry needs higher ranges of thicknesses and widths, allowing the better use of technology in the production of parts of high resistance, with higher geometric complexity, which are also lighter.
“We see sophistication in the steel products. The steel sector also needs to seek innovation. Demand for steel will be different from the demand we have today. The integration process needs to be absolute, seeking the complementarity, and the efficiency in each product and in each country,” he said.