Automotive Commodity Categories

When we look at the overall use of aluminum castings as the metal supply industry would prefer, we can see that the predominate categories are:

1. 1. Transmission & Driveline Housings.
   2. Road Wheels.
   3. Body Structures.
   4. Cylinder Heads.
   5. Engine Blocks.

With each of these general applications for aluminum castings, the demand is high enough for each category that entire factory complexes are set up to manufacturing these castings in the most efficient, there by most competitive, way possible.

Road Wheel Commodity – Characteristics

From an engineering perspective, lighter wheels can improve handling and fuel economy by reducing unsprung mass, allowing suspension to follow the terrain more closely and thus improve grip.  However, due to stress modeling and design safety factors, the reality is that not all commercial OEM alloy wheels are lighter than what their steel equivalents would be.  So, the demand in aluminum alloy wheels is generally attributed to being able to satisfy a consumer demand for style and appearance.  During the rapid increase in demand during the early 2000’s, a common style for early aluminium alloy wheel designs imitated the crossed spokes of a wire wheel.  It was a heavy design, but the intricate and bold design appearance was far more desirable than any sort of wheel cover alternative.

While aluminum alloy wheels are in demand for their cosmetic appearance, an unprotected alloy wheel is highly susceptible to oxidation because it isn’t corrosion-resistant.  Therefore an aluminum alloy wheel casting must be be sealed with paint or a plasma vapor deposition (PVD) coating.  Even with these surface protections, aluminum wheels will eventually start to corrode after 5 years.  Although refurbishment of appearance is possible at a cost, after 5 years the wheel is generally functional.   Unfortunately, aluminum alloy wheels are more difficult to repair than steel wheels when bent, but their higher price usually makes repairs cheaper than replacement.

At the end of life, the aluminum alloy wheel still has a lot of value in the scrap supply.  As long as the wheel is only aluminum and doesn’t contain ferrous inserts at the lug nut locations, most scrap yards will pay up to 50% of the aluminum market price because it can be directly recycled.

Road Wheel Castings

The cast-aluminum road wheel commodity is almost entirely produced by the Vertical Low Pressure die casting process.  Most of the plants producing road wheels are vertically integrated with value streams beginning with raw materials:

1. 1. Aluminum melting (new ingots, remelting of scrap and machining chips), degassing, delivery and oxide removal.
   2. Casting with Vertical Low Pressure.
   3. Triming of rough casting.
   4. Machining, including chip reclamation.
   5. Painting.
   6. Packing for shipment.

Each casting commodity has a particular value stream that optimizes the competitiveness for the OEM.  While the road wheel production value stream listed above is found in the most competitive operations, the automotive OEM companies purchase the wheels from Tier 1 companies.