DETROIT PARIS BERLIN SHANGHAI BANGALORE



## September 7 , 2011 **FINAL** 

## Aluminum in 2012 North American Light Vehicles **Executive Summary** TRANSPORTATION CONSTRUCTION INDUSTRIAL MATERIALS FINANCIAL

## AGENDA 

## SURVEY OBJECTIVES, APPROACH AND RESULTS SURVEY SYNOPSIS

2

## SURVEY OBJECTIVES, APPROACH AND RESULTS Primary Study Objective – Survey the North American automakers to obtain an accurate estimate of 2012 North American light vehicle aluminum content. Secondary Study Objective – Survey the North American automakers to obtain an estimate on the “most likely” material mix for North American light vehicles through 2025. All the most relevant factors affecting the future mix were taken into account includin g technology, cost, material availability and the recently announced fuel economy goal of 54.5 MPG by 2025. Methodology – Ducker maintains a proprietary vehicle - by-vehicle 32,000 cell database on metallic materials in light vehicles and uses the database to forecast metallic material content and trends by segment, Original Equipment Manufacturers (OEMs) and for as many as 90 different components made from the major product forms for iron, flat rolled steel, aluminum and magnesium. During the spring/summer of 2011, interviews were conducted with automotive engineers at the major auto manufacturers to update the Ducker database and d iscuss their future material strategies. Results  Ducker estimates 343 pounds of finished aluminum per vehicle in 2012, up from 327 pounds in 2009.  Aluminum is expected to double its share of the average light vehicle material mix to 16% by 2025 compared to the 2008 Enviro nme ntal Protection Agency (EPA) base year.  Aluminum currently is the dominant material for powertrain, heat exchangers and road wheels and the study reveals it is rapid ly gaining market share for hoods (30%), trunk lids, bumpers, steering knuckles and suspension arms.  Average vehicle weight (not necessarily size) will be reduced by 408 pounds by 2025 or 10% less than the EPA base year of 2008.  Aluminum is gaining share at the expense of both traditional and high strength steels (HSLA) which are declining as a percent of the mix.  Advanced High Strength Steels, with a 590 MPa or more tensile, are also growing at the expense of inferior steels, but AHSS provides limited weight savings potential compared to aluminum. Pound for pound, aluminum replaces more than twice as much weight as A HSS .  Direct cost of the materials upgrade is estimated at less than $500, before secondary any cost savings from downsized compone nts are taken into account.  Consumers will see high volume, aluminum - bodied vehicles on the road before the end of this decade.

0% 5% 10% 15% 20% 25% 30%Share of Curb Weight Share of Curb Weight Under 54.5 MPG Scenario Flat Rolled BH, HSS & AHSS Share Aluminum Share Flat Rolled Mild Steel Share

3 2008 2025 0 50 100 150 200 250 300 350 400 450Pounds Aluminum Pounds per Light Vehicle History and Identified Growth

77 lbs. 400 lbs .

## SURVEY SYNOPSIS  

### Current aluminum growth is driven by new applications for body, bumpers and closures. Thirty percent of all the hoods on 2012 vehicles will be aluminum; saving 100 million pounds of vehicle weight. Future growth will be driven primarily by the continued conversion of steel to aluminum in these same closure applications, body structures and bumpers. Aluminum saves weight because it has a density of only one third of AHSS. On stiffness dependent components (i.e. hoods, fenders, deck lids) increasing thickness of the aluminum to match steel component stiffness results in aluminum components at half the weight of the steel components they replace. Ducker estimates increasing average vehicle aluminum content by 225 pounds per vehicle by 2025 will result in 180 pounds vehicle weight reduction with no change in component performance.  A

### dvanced High Strength Steels (AHSS) with a tensile strength of 590 MPa or above. These steels don’t save enough weight. AHSS saves weight through gauge reduction. Due to stiffness limitations, there is a limit on how thin components such as hoods, deck lids, doors and fenders can be and maintain functionality. AHSS has the same density as mild steel. Use of AHSS is expected to increase by 250 pounds per vehicle by 2025 for strength driven body components. This will result in a maximum average vehicle savings of 80 pounds from the new steels. The AHSS under development simply improves the formability of current AHSS. The density of the new AHSS, soon to be introduced, will remain 2.9 times the density of aluminum.

1% 3% 3% 3% 5%

10%

16%

19% 58%

0% 50% 100% Heat Transfer Engine Transmission & Driveline Wheels & Brakes Average Increase Steering Suspension Crossmembers Body, Bumper & Closure 2009- 2012 Aluminum Content Growth

Engine Blocks, Closures, Bumpers, Steering Knuckles, Differentials Carriers, Powertrain Mounts and IP Structures are expected to set all time content and consumption records in 2012 Over 200 million major parts i n 2012

4 50% 51% 54% 42% 38% 30% 8% 11% 16%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2008 2015 2025 Material Mix in Total is Shifting to Lower Density Materials as a % of Curb Weight All other Materials Flat Rolled Steel Aluminum 100% Low Density Aluminum 100% High Density Flat Rolled Steel 75% Low Density Polymers, zinc, steel long products, copper, iron, lead, magnesium, glass , rubber, textiles, wood, coatings and fluids (primarily closures)

## SURVEY SYNOPSIS  Aluminum will grow from 325 pounds in 2008 EPA base year to 550 pounds by 2025 and save 180 to 200 pounds of direct curb weight and 78 pounds of secondary curb weight.  The average cost of direct weight savings is estimated to be approximately $2.00 per pound of weight saved not including cost savings from secondary weight reductions. The 78 pounds of secondary weight savings will help offset this penalty .  Increased use of aluminum is absolutely necessary to achieve a cost effective weight reduction of over 400 pounds by 2025.  Weight savings opportunities with AHSS are limited beyond conversion of the safety cage and a few other strength dependent parts. A few major OEMs have already reached this point in most of their vehicles. For these OEMs, increasing aluminum intensity is the logical next step.  Adding 225 pounds of aluminum in less than 20 years is a dramatic increase. Based on history and identified new applications, North American OEMs will add 250 pounds in the period from 1990 to 2015. The 3.5 % CAGR aluminum growth rate needed to attain 550 pounds and 16% of curb weight by 2025 is a conservative forecast in our opinion.

5 0 100 200 300 400 500 6001975199020052020Pounds per Vehicle Aluminum Content in Pounds per Light Vehicle

- History and Forecast -

3.5% CAGR2009 - 327 2012 - 343 550 lbs. The trend line continues to be supported by new aluminum applications 12% 7% 11% 16% 5% 1% 2% 8%

8% 2% 3% 25%

Aluminum 16% Curb Weight 3427 lbs. 2025 Light Vehicle Material Mix

as a Percent of Curb Weight


### Steel 46% Non Metallics 25%
Other Metals

13%

## AGENDA
EXECUTIVE SUMMARY

6

## INTRODUCTION AND ASSUMPTIONS Ducker Introduction  Ducker Worldwide has collected data for the Aluminum Association’s Aluminum Transportation Group (ATG) on the growth and development of aluminum content in light vehicle applications on an annual basis since 1991.  Ducker started its systematic aluminum research efforts in North America in 1991, expanded into Europe and Japan in 2000 and the remainder of the world in 2007.  Ducker has been conducting studies on HSLA (high -strength, low-alloy) and AHSS use for the American Iron and Steel Institute since 2006.  Ducker performed recent studies for the EPA and the Department of Energy (DOE) on metallic material options, including magnesium, for reducing vehicle weight up to 25% in order to increase fuel economy. OEM interviews were a major part of these efforts.  Ducker maintains a proprietary vehicle- by-vehicle 32,000 cell database on metallic materials in light vehicles, and uses the database to forecast metallic material content and trends by segment, OEM and for as many as 90 different components made from all the major product forms for iron, flat rolled steel, aluminum and magnesium. OEM and supplier input obtained on a regular basis is the major source of this data.

7Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

##  An average of at least 2.5% for GDP in the U.S over the next ten years. GDP = Consumption + Investment + Government Purchases + Net Exports  North American light vehicle production of 13.9 million vehicles in 2012 with at least 75 million vehicles produced in the period 2012 – 2016.  A combined fuel economy standard of at least 51 mpg for 2025 will be put in place in the next twelve months, and remain in effect through administration changes in Washington.  S pecific aluminum products needed to fill the future demands of OEM’s and their parts suppliers will be available in a timely manner.  The aluminum industry will provide the necessary technical support to satisfy OEM and parts suppliers needs for the latest aluminum technology.  Oil prices will remain between $80 and $120 per barrel with the same volatility as the last five years for the next five years. INTRODUCTION AND ASSUMPTIONS

Basic assumptions of the study.

8Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

## Aluminum content in North American (NA) light vehicles has achieved 37 years of uninterrupted growth. Ducker expects average 2012 vehicle content of 343 pounds:  

### NA light vehicle industry to require 4 . 5 million closures, 7 million bumper beams, 13 . 9 million steering knuckles, 11 . 9 million suspension arms, 1 . 7 million cross members and sub frames, 1 . 5 million drive shafts, 4 . 5 million differential carriers, 22 million powertrain mounts, 32 million cylinder heads and blocks and 39 million aluminum wheels .  

### Engine blocks, closures, bumpers, steering knuckles, differentials carriers , powertrain mounts and IP Structures are expected to set all time content and aluminum consumption records in 2012 .  

### Sixty percent of the growth from 2009 will be for structural components made from primary aluminum . In the prior decade, the majority of the aluminum content growth was from non -structural components made from secondary aluminum .  

### Body, bumper and closure content grew by 58% from 2009 to 2012 . 30% of all the hoods and over 20% of the bumper beams will be aluminum in 2012 . This is a great indicator for future mill product aluminum growth . Trend line for aluminum hood penetration predicts a minimum 41 % share for aluminum hoods in 2017 and at least 53% by 2025 even without any further fuel economy regulations . With the 2025 standards announced in early August 2011 , the total predicted 2025 share for all aluminum closures including, hoods, doors, trunk lids and fenders is 42 % .  

### Imported cast wheels (China) will be used for 50% of the total 2012 light vehicle aluminum wheel requirement . Aluminum will represent 70% of the road wheels required . Engines and transmissions will contain 335 million pounds of non - NAFTA imported aluminum components .  

### The only major component that will show an aluminum content decline in 2012 over 2009 is intake manifolds . Manifolds continue to move to magnesium, reinforced nylon and other polymer composites . 

## OBSERVATIONS AND CONCLUSIONS

Core findings of the 200 page proprietary study.

9Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com


###  

### Latest models with above average aluminum content are: Chevy Malibu, Cadillac XTS/ATS/CTS, Dodge/Fiat C Sedan, Ford Explorer, Escape and MKZ, Honda CR-V and Accord, Nissan Altima, Toyota Avalon and Fiat 500.  

### D Segment vehicles represent the largest share of each of the five part families considered for conversion to aluminum. The D Segment will contain 363 pounds of aluminum overall (10% of curb weight).  

### E Segment vehicles are the most aluminum intensive with an average aluminum content of 421 pounds (9.7% of curb weight).  

### Large full frame (LFF) vehicles , mainly pickup trucks, contain below average quantity of structural aluminum components, but a slightly above average amount of aluminum overall at 354 pounds (6.8% of curb weight).  

### Ducker believes the future growth of aluminum is highly dependent on the D, E and LFF segments. These segments, particularly LFF, are not good candidates for size reduction due to comfort and functionality requirements. These segments need aluminum bodies and doors more than the other segments.  

### Beyond 2012, growth will depend on new applications expected to appear in the next five years. New applications are being driven by the 2016 CAFE standard of 35.5 MPG. On September 30, 2011 the EPA ruling for 2017 to 2025 fuel economy will be issued with a 2025 passenger car target of 54.5 MPG and a light truck improvement target of 3.5% per year from 2016 to 2021, and the 2025 truck target “to be determined.” 

## OBSERVATIONS AND CONCLUSIONS

GM is the aluminum content leader of the major OEMs at 366 pounds. Honda is the leader for aluminum content as a percent of curb weight at 10.7%.

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###  

### Standards for 2016 will push aluminum content from the 2012 level of 343 pounds per vehicle to 375 pounds per vehicle by 2015/2016. The pending 2017 standard is likely to add at least 20 to 25 additional pounds. If there is no 2017 mandate the 20 additional pounds would be in jeopardy. Aluminum growth to near 400 pounds of aluminum per vehicle will be driven by growth in: closures , bumpers and bodies. T raditional aluminum components including engine blocks, wheels and steering knuckles will represent only 15% content growth through 2025.  

### During this decade, light vehicle aluminum content growth shifts from castings to mill products.  

### U.S. desire to reduce greenhouse gas emissions and reduce NAFTA dependence on oil imports is driving a multitude of proposals and options for improving fuel economy. A final set of recommend standards for 2017 - 2025 will be issued by NHTSA/EPA on September 30, 2011.The NHTSA/EPA recommendations will be based on significant weight savings.  

### Ducker believes the NHTSA/EPA recommendations will be based on a maximum overall weight reduction of 10% to 12% on a sliding scale from small to large vehicles with a combined fuel economy target of between 51 MPG and 56 MPG. (54.5 MPG is in latest announcement, for cars with special treatment for trucks).  

### Any 2025 target over 50 MPG is very likely to result in unprecedented aluminum content growth.  

### An average weight savings of 400 pounds based on the EPA starting weight of 4,085 will require a 2025 aluminum content at or near 550 pounds per vehicle. This equates to a fuel economy of 51 MPG with 44% HEV penetration. An overall flat rolled AHSS content of 375 pounds an a 2% reduction in average vehicle footprint will also be required.  

### Aluminum content will increase to 671 pounds or 80% from the 373 pounds 2012 per vehicle for light trucks. Aluminum content will increase to 451 pounds or 50% from the 309 pounds in 2012 for cars. The aluminum product mix will go from 81% castings and 19% mill products to 39% mill products and 61% castings under the 550 pounds of aluminum per vehicle in 2025. 

## OBSERVATIONS AND CONCLUSIONS

OEMs efforts to meet 35.5 mpg by 2016 coupled with the uncertainty surrounding the fuel economy standards beyond 2016 has caused a flurry of down weighting activity in the last two years.

11Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

### Ducker prefers segment analysis for material content studies, but the classic “car versus “truck” breakdown is also used for some comparisons.  The 2012 -2026 and 2017-2025 fuel economy standards are footprint based; however, the target MPG per square foot are different for “cars” versus “trucks”. The final targets of 35.5 MPG for 2016 and 54.5 for cars and at least 46.5 for light trucks for 2025 covers the entire mix . However, every OEM has their own target for fuel economy based on their specific vehicle characteristics. The 2017-2025 rule will give trucks a slower ramp up in MPG than expected for the period 2017-2021. Most likely 2025 segment breakdown is 55% cars and 45% trucks. The 550 pounds of aluminum per vehicle in 2025 to be split 451 pounds for cars and 671 pounds for trucks 

## .  Trucks including SUVs use more aluminum per vehicle than cars because they can not be easily downsized in terms of footprint, and they have larger engines and transmissions with larger aluminum heads, blocks and transmission cases than most cars.

12 46% 55% 54% 45%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2012 2025 

## Car vs. Truck

Cars Trucks 309 373 343 451 671 550

0 100 200 300 400 500 600 700 800

Cars Trucks AveragePounds per Vehicle 

## Aluminum Pounds per Vehicle

2012 2025 

## OBSERVATIONS AND CONCLUSIONSTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

### The use of aluminum in NA light vehicles will shift to a significantly larger share of mill products versus castings by 2025.

1 3 164, 48% 114, 33% 34, 10% 27, 8%

4, 1% 

## 2012

190, 34%

146, 27% 156, 28% 48, 9%

10, 2% 

## 2025 Permanent Mold & Sand Cast High Presure Die Cast Flat Rolled Extruded Forged 

### 550 Pounds Car 451 Pounds Truck 671 Pounds 343 Pounds Car 309 Pounds Truck 373 Pounds 19% Mill Products 23% / 15.5% Car / Truck 39% Mill Products 29% / 47% Car / Truck 

## OBSERVATIONS AND CONCLUSIONS

Type of Vehicle Increase in Aluminum

Content Car 50% Truck 80%ducker.com 

### Aluminum is expected to double its share of the light vehicle material mix by 2025 vs. the 2008 EPA baseline vehicle.

26%

13%
3% 16% 1% 7% 8% 1% 3% 22%



## 2008 Mild Flat Rolled Steel FR BH & HS Steel (HSLA) FR AHSS All Other Steel Flat Rolled Aluminum Aluminum Profiles Structural Alumium Castings All Other Aluminum Iron Copper Other Metals Non Metallics 23%

13% 

## 5% 16% 1% 1%

7% 8% 1% 3% 22%



## 2012

17%

14% 

## 7% 16% 2% 1%

8% 8% 1%3% 23%



## 2015 12% 7% 

## 11%
16% 5% 1% 2% 8% 8% 2% 3% 25% 

## 2025

Aluminum 16% Aluminum 8% Aluminum 9%

Aluminum 11% 

### 3800 lbs. 3835 lbs.

3700 lbs. 3427 lbs. 

## OBSERVATIONS AND CONCLUSIONS

14Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

## AGENDA
COMPONENT ANALYSIS

15Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com

125 14 23 2449 60

69 70

88 89112 115

126 130 371 516 588 636 785 790

0 100 200 300 400 500 600 700 800 900 All Other Compnents Drive Shafts & Yokes IP Structure Cradles & Crossmembers Engine Mounts Other Steering Differential Carriers Bumpers Transfer Cases Control Arms & Links Intake Manifolds Steering Knuckles Closures Brake Parts Other Engine Heat Transfer Cylinder Heads Cylinder Blocks

Transmissions Wheels



## Millions of Pounds 2012 Millions of Pounds of Aluminum Content

Engine Blocks, Closures, Bumpers, Steering Knuckles, Differentials Carriers, Powertrain Mounts and IP Structures are expected to set all time content and aluminum consumption records in 2012

16 

## COMPONENT ANALYSIS Aluminum content in 2012 will be concentrated in non -structural components; structural components will be at an all time high of 15-20% of the mix.Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com

1 1 1.23.7 4.4 4.5 4.56.9 7.4 11.1 11.5

12.7

13.9 20.9 22 39 41.5

0 10 20 30 40 50 Instrument Panel Supports Subframes Other Transmission Cases Transfer Cases Drive Shafts and Yokes Differential Carriers Closures Bumper Beams Intake Manifolds Blocks Suspension Arms Auto Transmission Cases Steering Knuckles Heads Powertrain Mounts Wheels Heat Exchangers 

## 2012 Millions of Aluminum Parts

There will be over 200 million major aluminum components in 2012 light vehicles COMPONENT ANALYSIS The number of aluminum parts that had to be engineered and will be manufactured for the 2012 vehicles will be an all time record.

17ducker.com

37%

20% 11% 19% 4% 2% 0% 5% 2% 

## 2012 Engine Transmission & Driveline Heat Transfer Wheels & Brakes Steering Suspension Subframes & Crossmembers Body, Bumper & Closures All Other 38%

20% 11% 20% 3% 2% 0% 3% 3% 

## 2009 Engine Transmission & Driveline Heat Transfer Wheels & Brakes Steering Suspension Subframes & Crossmembers Body, Bumper & Closures All Other

0 20 40 60 80 100 120 140

Engine Transmission & Driveline Heat Transfer Wheels & Brakes Steering Suspension Subframes & Crossmembers Body, Bumper & Closures All Other 122.7 66.1 36.7 64.3 11.5 5.5 1.45 10.3 8.5 125.9 68.4 37 66 12.6 6.4 1.72 16.3 8.7Pounds per Vehicle 

### Aluminum Content By System/Component

2009 2012
18 

## COMPONENT ANALYSIS Aluminum use in structural applications demonstrate 36% growth in 2012 versus 2009.

In 2012, 10 pounds of structural parts were added to every light vehicle since 2009. Structural ComponentsTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com


### Product PM Castings HPDC R&B, Tube & Shapes HT Sheet Fin Stock/ NHT Sheet Forgings Pounds per Vehicle 164 114.6 26.8 9 25.2 3.7 Change +8.6 +3.4 +3.3 +3 +0.2 -2.2 

###  32% increase in extruded shapes and a 50% increase in heat treated sheet from 2009 to 2012 is a good sign for aluminum mill products content going forward.  Forging decline reflects components originally classified as forged in 2009 that had to be reclassified as permanent mold castings for 2012.  S low trend to primary vs. secondary aluminum content continued over the last three years. In North America, the ratio is close to 50/50. Globally, the ratio is 57% secondary and 43% primary.  The 2015 and 2025 North American light vehicle aluminum product mixes will look much different.

19 

### Summary of the aluminum product mix in 2012 versus 2009. 

## COMPONENT ANALYSISducker.com



### 1%

3% 3% 3%

5% 10% 16% 19% 58%

0% 10% 20% 30% 40% 50% 60% 70% Heat Transfer Engine Transmission & Driveline Wheels & Brakes Average Increase Steering Suspension Crossmembers Body, Bumper & Closure 

## 2009 to 2012 Aluminum Content Growth COMPONENT ANALYSIS

The total increase in aluminum content from 2009 to 2012 was

an unspectacular 5%, but the growth for structural components verged on outstanding No other chart shows what the aluminum industry has accomplished in the last three years better than the chart below.

20 (over 50% from closures)Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com

C 3%

D 41% E 33% LFF 23% 

## 2012 Closures by Segment 129 Million Pounds

4.585 Million Parts 9.05 lbs/vehicle

5.9 lbs/vehicle in 2009 

## Over 30% of all the hoods will be aluminum in 2012

**In the Near Future**

21 

## COMPONENT ANALYSIS Aluminum closure pounds per vehicle will increase by 50% from 2009 to 2012.Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com

y = 0.0146x - 29.038 R2 = 0.9836

0% 5% 10% 15% 20% 25% 30% 35%

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 

## Aluminum Hood Share of the LV Hood Market

0% 5% 10% 15% 20% 25% 30% 35%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 6% 10% 14.30% 18.60% 23.30% 30.50% 

## COMPONENT ANALYSIS Trend for aluminum hood penetration predicts a minimum 41% share in 2017 and 53% by 2025, even without any further fuel economy mandates .

22ducker.com

A/B 0% C 40%

D 45% E 12% LFF 3% 

## 2012 Bumper Beams by Segment 70.8 Million Pounds

6.93 Million Parts

5.08 lbs/vehicle 2.98 lbs/vehicle in 2009

23 

## COMPONENT ANALYSIS A

verage aluminum bumper pounds per vehicle increased significantly over the last three years.ducker.com

A/B 2% C 11%

D 51% E 30% LFF 1% OFF 5% 

## 2012 Knuckles by Segment 115.2 Million Pounds A/B 9%

C 56% D 16% E 1% LFF 18% 

## 2012 Control Arms and Links by Segment 88.5 Million Pounds

13. 9 Million Units

8.26 lbs/vehicle

7.2 lbs/vehicle i n 2009 11.5 Million Units 6.35 lbs/vehicle 5.48 lbs/vehicle i n 2009

24 

## COMPONENT ANALYSIS Over 55 million pounds of knuckles are accounted for by D segment vehicles, while C segment vehicles account for approximately 50 million pounds of control arms and links.

## AGENDA
VEHICLE SEGMENT ANALYSIS

25Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com



### 2012 - 13,937,000 Vehicles will be Produced 46% “Car” and 54% for Light Truck

26 

## VEHICLE SEGMENT ANALYSIS

North American 2012 vehicles in the seven vehicle segments studied are shown below.

Source: Global Insights / PwC Segment Examples Segment Examples Segment Examples Segment Examples A 0.3 % 3 Vehicles Fiat 500

D 36% 64 Vehicles Acura TL

E 15% 27 Vehicles Cadillac CTS

Full Size Full Frame 19% 41 Vehicles Toyota Tundra B 2.7% 9 Vehicles Ford Fiesta Acura ZDX Chevy Impala Nissan Titan

C 23% 40 Vehicles Chrysler 200 BMW X6 Ford Taurus Ford F- 150 Chevrolet Corvette Buick Lacrosse Jeep Grand Cherokee Chevy Silverado Ford Escape Chevrolet Camaro Nissan Maxima Cadillac Escalade Honda CRV Chevrolet Malibu Chrysler 300 Dodge Ram Ford Focus Ford Mustang For Explorer GMC Sierra VW Jetta Honda Pilot / MDX Ford Flex Other Full Frame 3% 11 Vehicles Toyota Tacoma Chevy Volt Nissan Altima Toyota Avalon Jeep WranglerTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

### Ducker believes a “car” versus “truck” analysis is much less valuable for material content analysis than a vehicle segment analysis. The car/truck reference is prevalent in the literature and in the NHTSA/EPA rulings. Therefore, we provide the 2012 production data cut both ways for comparison.

27 2012 SEGMENT Car Truck Total A&B- Segment Total 485,610 50,950

### * 536,560 C- Segment Total 2,402,340 719,271 3,121,611 D - Segment Total 2,944,868 2,082,120 5,026,988 E - Segment Total 607,728 1,475,776 2,083,504 Compact Full - Frame Total 418,498 418,498 Full - Size Full - Frame Total 2,645,673 2,645,673 Mini Full - Frame Total 56,558 56,558 Grand Total 6,440,546 7,448,846 13,937,000



## VEHICLE SEGMENT ANALYSIS

2012 Segment Car Truck Total A&B 90.5% 9.5% 100.0% C 77.0% 23.0% 100.0% D 58.6% 41.4% 100.0% E 29.2% 70.8% 100.0% Full Size FF 100.0% 100.0% Other FF 100.0% 100.0% Grand Total 46.4% 53.6% 100.0% 2012 SEGMENT Car Truck Average A&B- Segment 230 224 229

C - Segment 265 310 275 D - Segment 332 407 363 E - Segment 417 423 421 Compact Full - Frame 330 330 Full - Size Full - Frame 354 354 Mini Full - Frame 311 311

Grand Total 309 373 343 

### 2012 Aluminum Pounds per Vehicle Segmented by Segment and by Car versus Truck The 2012 -2016 and 2017-2025 f uel economy regulations/rules are footprint based; however the target MPGs per square foot are different for “cars” versus “trucks”. The final targets of 35.5 MPG for 2016 and 54.5 for cars and at least 46.5 for light trucks in 2025. The 2017-2025 rule will allow trucks to have a slower improvement rate than cars for the period 2017-2021. Based on a split of 55% cars and 45% trucks in 2025. Ducker expects the 550 pounds of aluminum per vehicle to be split 451 pounds for cars and 671 pounds for trucks.

*Ford CUV, Nissan Note, GMC Granite, Chevy BCUV 

### 2012 Production DataTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com



### 0 50 100 150 200 250 300 350 400 450
229 275 363 421 329 354 343Aluminum Pounds per Vehicle 

## 2012 Aluminum Pounds per Segment

28 

## VEHICLE SEGMENT ANALYSIS E Segment vehicles lead the way with total aluminum pounds per segment; as a share of curb weight, the D segment vehicles average over 10% of c urb weight in aluminum.Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

### Parts A/B C D E LFF OFF Millions of Pounds 1. Closures - 3% 41% 33% 23% - 126 2. Bumpers - 40% 45% 12% 3% - 70 3. Knuckles 2% 11% 51% 30% 5% 1% 115 4. Arms - 9% 56% 16% 18% 1% 89 5. Other Structures - 23% 62% 15% - - 50

Sum of 1,2,3,4,5 3.6 20.4 44.4 50.7 20.1 5.2 32.7 Total of All Aluminum Pounds / Vehicle 229 275 363 421 354 329 343 

## VEHICLE SEGMENT ANALYSIS

 D Segment vehicles represent the largest share of each of the five part families of most interest to the client. The D Segment will contain 363 pounds of aluminum overall which will be 10% of curb weight.  E Segment vehicles; however, are the most aluminum intensive segment overall for the key components with an average weight per vehicle of over 50 pounds of these critical parts. With 421 pounds of aluminum overall which will be 9.7% of curb weight.  Large full frame vehicles, mainly pickup trucks, contain a below average quantity of the critical aluminum components , but a slightly above average amount of aluminum overall at 354 pounds This equates to a below average of 6.8% of curb weight.  Ducker believes the future growth of aluminum is highly dependent on the D , E and LFF segments. These segments, particularly the LFF segment, are not good candidates for vehicle size reduction due to comfort, safety and functionality requirements. These segments need aluminum bodies and doors more than the other segments. 29 

### Summary of vehicle segment analysis.ducker.com 

### N ewest vehicles have an average aluminum content of 10.4% rather than the 2012 average for all vehicles of 9%. VEHICLE SOP EOP % Aluminum Total Aluminum Pounds Fiat 500(312) Dec-2010 Jun -2015 10.50% 254 Chrysler 300(LX) Dec-2010 Dec-2016 10.60% 420 Ford Explorer(U502) Nov-2010 Dec-2016 9.90% 466 Hyundai Elantra(UD) Nov-2010 Dec-2015 9.60% 256 Mercedes - Benz ML- Class(W166) Jul -2011 Jun -2018 11.6% 581 Ford Escape(C520) Oct-2011 Mar-2017 10.9% 355 Ford Focus(C346) Jan -2011 Dec-2016 9.8% 260 Saab 9 -4X(GMT168) Apr-2011 Dec-2015 11.6% 406 Honda Civic(2HC) Jan -2011 Jun -2016 10.4% 270 Honda CR-V(2WS) Aug-2011 Jun -2016 10.9% 290 Volkswagen D - Sedan (NMS)(VW411) Apr-2011 Apr-2017 9.1% 347 Chrysler/Fiat C-Sedan Jan -2012 Dec-2016 11.3% 351 Dodge Viper(ZD) Nov-2012 Oct-2017 10.7% 369 Mercedes - Benz GL- Class(X166) Jul -2012 Jun -2019 9.6% 525 Ford Fusion(CD391) Jun -2012 May-2017 10.2% 336 Lincoln MKZ(CD533) Jun -2012 May-2017 11.3% 397 Cadillac ATS(A1SL) July 2012 Jun -2017 10.3% 361 Chevrolet Malibu(GMX351) Feb-2012 Jul -2017 11.2% 385 Cadillac XTS(P1LL) Mar-2012 Feb-2018 10.7% 408 Honda Accord(2GA) Aug-2012 Jul -2017 10.7% 347 Nissan Altima(L42L) Dec-2012 Nov-2017 11.1% 355 Toyota Avalon(170A) Nov-2012 Oct-2017 10.6% 380 

## VEHICLE SEGMENT ANALYSIS

30 Vehicles of Note for AluminumTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com OEM A B C D E F G H Average CW Lbs. 4161 4089 3256 4087 3481 3256 3104 3001 3800 Lbs./Vehicle 366 361 350 345 312 303 292 261 343

% of CW 8.8 8.8 10.7 8.4 10 9.3 9.4 8.7 9.0

6 year +38 +61 +20 +27 -4 -7 +30 -6 +27 

## VEHICLE SEGMENT ANALYSIS

 GM is the North American aluminum content leader of the major OEMs at 366 pounds.  Honda is the leader for aluminum content as a percent of curb weight at 10.7%.  The latest models with above average aluminum content are: Chevy Malibu, Cadillac XTS/ATS/CTS, Dodge /Fiat C Sedan, Ford Explorer, Escape and MKZ, Honda CR-V and Accord, Nissan Altima, Toyota Avalon and Fiat 500. Summary of vehicle and OEM analysis for 2012 excluding low volume OEMs.

31 261 343 391

0 100 200 300 400 500Pounds per Vehicle 

### Unibody and Full Frame Average Aluminum Content for the Major OEMs

OEM Data Points 

### S pread from high to low from the average of 343 pounds is + 48 and – 82 including full frame trucks.32 

## VEHICLE SEGMENT ANALYSIS

B, C and D segment vehicles will increase their share of total production at the expense of full frame and E segment vehicles; with as little as 2% sales growth for the E Segment and large full frame vehicles a constant volume of 4.6 million units per year over the entire period from 2012 to 2025.

Source: Ducker, IHS / CSM 0 5 10 15 20 25 30 35 40Percent of Total Production

2008 2012 2017 2025 Segment 2008 % 2012 % 2017 % 2025 % B- Segment 2.2 4.1 8.7 9 Other Full - Frame 5.4 3.4 3.7 3.3 C- Segment 22 23.2 23.6 26.2 D - Segment 35 36 36 37 E - Segment 14.4 14.7 11.7 10 Full - Size Full Frame 21 18.6 16.3 14.5 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2008 2012 2017 2025 B- Segment Other Full - Frame C - Segment D - Segment E - Segment Full - Size Full - Frame

0 1 2 3 4 5 6

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2025 Millions of Units Forecast of E and LFF Production with 2% CAGR for Vehicle Sales from 2017 to 2025

## AGENDA
2012 AND BEYOND

3387 114 130 137 141 150 165 183 202 224 242 258 275 295 316 325 330 343 377400

0 50 100 150 200 250 300 350 400 450Pounds 

## Aluminum Pounds per Light Vehicle

**- History and Forecast** **** Forecast

34 

## 2012 AND BEYOND After a short period of slow growth, NA light vehicle aluminum content will take a large step toward the long term trend line in 2012, reaching 400 pounds per vehicle by 2015/2016.Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com

12 10 6 3 2 3 5 8 10 11 12 1 4 8 11



## 0 5 10 15 20 25

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Pounds per Vehicle 

## North American Light Vehicle Aluminum Content Increases Pounds per Vehicle New Applications

35 

## 2012 AND BEYOND To achieve 400 pounds by 2015/2016 a growth scenario with significant new applications is required. Ducker believes there are positive signs that these applications will be in place by 2015/2016.

(Primarily body, bumper and closure components)Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com

24 28 30 24 30 34

11 16 33 24



### 0 10 20 30 40 50 60Pounds 

### Looking at Aluminum Growth per Year in Three Year Blocks is More Accurate than single year analysis

Period Upside Period Increase New Applications

36 

## 2012 AND BEYOND Aluminum growth analyzed at a three year interval is more meaningful than annual analysis.

Source: DuckerTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com



### 46 48 50 52 54 56 58

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 

## MPG

HEV % 

## HEV Share versus MPG with 10% Light Weighting and ICE Optimization

51 MPG



### 44% 

## 5% CAGR

4% CAGR
3% CAGR

37 

### The Ducker long term forecast is based on: 10% average weight savings, 44% HEV, very little footprint reduction by segment and a most likely 51 MPG fuel economy target for 2025.

Line slope is based on limited data, and is somewhat conceptual 

### Note: Some PHEV and EV use will allow the overall alternative powertrain share to be somewhat lower 54.5 MPG



### 28% 48.6 MPG 

### 80% 

## Low Based on 3.5% or 40.6 for trucks 

## High Based on 54.5 average for both 

## Most Likely Based on 54.5 for cars and 46.5 for trucks 

## 2012 AND BEYOND

## 5% 15%

A 10% reduction from the 2008 average vehicle weight would require target reductions very close to the weight reductions by segment shown above 

## We believe the revisions to the September 2010 Proposal of Intent will vary weight reduction by vehicle segment. Ducker believes the average will be 10% due to safety concerns about reducing weight in the A, B & C segments.

38 

## 2012 AND BEYOND Ducker believes the original weight reduction option assumptions outlined by NHTSA/EPA will be changed dramatically in the final ruling. A 25% reduction is no longer considered achievable. OEMs, however, could choose to act differently as long as they do not sacrifice safety.

- 130 - 150

- 185

-300

-400 -400

-500

-800

- 900 - 800 - 700 - 600 -500 -400 -300 -200 - 100 0 A B C D Average Medium FF E Large FFPounds per Vehicle 

## Needed Weight Reduction by Vehicle Segment
Adjusted for Mix229 275 363 421 329 354 343 250 315 410 470 350 535 400 294 364 513 620 597 975

550



### 0 200 400 600 800 1000 1200

A/B - Segment C - Segment D - Segment E - Segment Other Full Frame Full - Size Full Frame AveragePounds per Vehicle 

## Base Case Aluminum Content by Segment

- Forecast -

2012 2015/2016 2025 Sheet Increase

39 

## 2012 AND BEYOND Within the anticipated NHTSA weight reduction targets by vehicle segment, aluminum content shown below would be needed to satisfy the overall reduction estimate of 10%. The additional amount of aluminum will range from 65 pounds per vehicle for A/B segment vehicles to 621 pounds per vehicle for Large Full Frame (LFF) pickups and large SUVs.

+207 +621 +268 +199 +150 +89 +65 +22 +23 +83 +164 +122 +96 +422

Total IncreaseTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com



### 80, 20% 180, 44% 78, 19% 70, 17% 

## Sources of Weight Savings for 4% CAGR for MPG Add 250 lbs. of AHSS Add 225 lbs. of Aluminum Weight Compounding Effect Reduce Footprint One Square Foot 408 Pounds Saved

o r 10% over 2008 (the NHTSA/EPA Base Year

Inertia Weight) and 10.6% over the 2008 Curb Weight **Savings of over 400 pounds of curb weight by 2025 could come from the following sources:**

40 

## 2012 AND BEYOND A mixed material and footprint reduction strategy can save over 400 pounds or 10% over the 2008 EPA vehicle weight. This combined with 44% HEV or the equivalent in PHEV/EV share will result in 51 MPG by 2025.Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

### M aterial changes along with a 2 % footprint reduction will reduce average vehicle weight by 10% of 2008 average vehicle inertia weight and 10 . 6% from the 2008 average curb weight. When combined with HEV penetration of 44% and appropriate engine resizing, a 2025 fuel economy of 51 MPG is achievable with no decline in safety, performance, functionality or comfort. Cost of these changes with investment should be less than $ 1 , 000 per vehicle before considering cost savings resulting form secondary weight savings from other downsized components . 

## Average Light Vehicle Material Content in Net Pounds per Vehicle

41 

## 2012 AND BEYOND

Material Category 2008 2010 2012 2015 2025 Mild Flat Rolled Steel 999 976 861 650 408 FR BH & HS Steel (HSLA) 489 496 513 516 240 Flat Rolled AHSS 124 156 194 251 375 All Other Steel (Long Products) 602 606 596 580 542 Flat Rolled Aluminum 29 31 34 67 156 Aluminum Extrusions 10 12 14 19 30 Structural Aluminum Castings 20 20 22 25 60 All Other Aluminum 266 267 273 289 304 Iron 307 305 295 290 270 Copper 52 52 52 52 52 Other Metals 101 103 104 105 115 Polymers 340 345 350 366 400 Other Non Metallics 496 493 492 490 475ducker.com 

### To achieve a 10% weight savings, the light vehicle material mix will need to shift to lower density materials.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%



### 2008 2010 2012 2015 2025Percent of Curb Weight Non Metallics Other Metals Copper Iron All Other Aluminum Structural Alumium Castings Aluminum Profiles Flat Rolled Aluminum All Other Steel FR AHSS FR BH & HS Steel (HSLA) Mild Flat Rolled Steel 

## 16%

46% 38% 2008 34%
2008

8%

2008

58% Curb Weight Pounds 3835 3862 3800 3700 3427 - 408 

### 2025

42 

## 2012 AND BEYONDducker.com 

### M aterial mix shift is necessary to achieve a 10% weight reduction for light vehicles and 51 MPG.

999 976 861 650 408 489 496 513 516 240 124 156 194 251 375 602 606 596 580 542 29 31 34 67 156 30 60 266 267 273 289 304 307 305 295 290 270 52 101 103 104 105 115 340 345 350 366 400

0 500 1000 1500 2000 2500 3000 3500 4000

2008 2010 2012 2015 2025Net Pounds per Light Vehicle 

## The Mix of Finished Materials for Light Vehicles (includes weight compounding and 2% size reduction)

Polymers Other Metals Copper Iron All Other Aluminum Structural Alumium Castings Aluminum Profiles Flat Rolled Aluminum All Other Steel FR AHSS FR BH & HS Steel (HSLA) Mild Flat Rolled Steel 

### 3,427 lbs. 3,835 lbs.

43 

## 2012 AND BEYONDTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

### AHSS will replace HSLA steel to save weight, but the combined share of all the varieties of high strength steel has a finite penetration level as a percent of curb weight. Ducker believes that the combined limit is between 20% and 25%*. Substitution of aluminum for some portion of the Bake Hard and HSLA segments has already begun, with 30% of the hoods being aluminum in 2012. By 2016, the new steels will peak at 21 %. By 2025, both aluminum and the flat rolled bake hard, HSLA and AHSS combination will be about 16% of curb weight.

0% 5% 10% 15% 20% 25%Percent of Curb Weight Flat Rolled BH, HSLA and AHSS versus Aluminum as a percent of Curb Weight

New Steel's Share of Curb Aluminum Share's of Curb 

## *The material and alloy mix for wheels was held constant at 2012 levels for the analysis

44 

## 2012 AND BEYOND

50% 51% 54% 42% 38% 30% 8% 11% 16%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2008 2015 2025 

### Material Mix in Total is Shifting to Lower Density Materials as a Percent of Curb Weight

All other Materials Flat Rolled Steel Aluminum 100% Low Density Aluminum 75% Low Density 100% High Density Flat Rolled Steel Zinc, magnesium , titanium , platinum , steel long products , copper , iron, lead, polymers , glass , rubber, textiles , wood , coatings and fluids such as oil and gasolineducker.com 

### As aluminum and AHSS replace other steels to save weight, the mix of materials in light vehicles will show dramatic change.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%200820092010201120122013201420152016201720182019202020212022202320242025 Flat Rolled Mild, BH & HSS Share Flat Rolled AHSS Share Aluminum Share 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%200820092010201120122013201420152016201720182019202020212022202320242025Share of Curb Weight

Flat Rolled Mild, BH & HSS Share Aluminum Share Flat Rolled AHSS Share 

## Aluminum AHSS Other Flat Rolled Steel Steel is replacing itself with the help of aluminum

i n order to save weight. This mix with weight compounding and a 2 % size reduction will cut curb weight 10% .

This is how to save weight . Replace most of the flat rolled mild steel.

45 

## 2012 AND BEYONDducker.com 

### Over an 18 year period, light vehicle curb weight will be reduced by over 400 pounds while improving safety, performance and comfort; a testimony to the engineering ability of the American auto makers. A 51 -55 MPG average by 2025 is within grasp at a reasonable cost to the consumers.

0 500 1000 1500 2000 All Other Materials Polymers Other Metals Iron Aluminum All Other Steel Flat Rolled AHSS Flat Rolled Mild, BH and HSS



### Pounds per Vehicle 2008 2010 2012 2015 2025 

## - 840 

## + 251



## - 60 

## + 225



## - 37 

## + 14 

## + 60



## - 21 

## Finished Pounds per North American Light Vehicle

46 

## 2012 AND BEYONDducker.com

0 200 400 600 800 1000 1200 1400

2010 2017 2025Finished Pounds 

### Body, Bumper and Closure Content
Aluminum AHSS HSLA/BH Mild Steel

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2010 2017 2025 

### Body, Bumper and Closure Material Mix 

## 272 lbs. saved* 400 pounds of AHSS and Aluminum will replace 670 pounds of HSLA/BH And mild steel in the body, bumpers and closures

average light vehicle by 2025.
Aluminum and AHSS content for these components will go from 14% of the mix to 61% of the mix. This s hift will save nearly 25%

of the weight for these components in the average l ight vehicle.



## * Includes 2% size reduction and appropriate weight compounding 

### 20% 41% 17% 22% 1177 1041 905



### Mild Steel AHSS HSLA/BH Aluminum

47 

### The NA light vehicle material mix for body, bumper and closure components will change dramatically over the 2010 thru 2025 timeframe. 

## 2012 AND BEYONDducker.com 

### Adding 400 pounds of aluminum and AHSS to the body, bumpers and closures of the average light vehicle along with a 2% footprint reduction and minor weight compounding in the body can save 272 pounds by 2025. This will reduce other steel content in the body, bumpers and closures by 650 to 700 pounds, and make a major contribution to the goal of an economical 400 pound (10%) average weight reduction of 5- 15% depending on current vehicle size and segment. 

## Add 172 Add 228

-672 -272

-800 -700 -600 -500 -400 -300 -200 - 100 0 100 200 300



## Aluminum AHSS HSLA/BH/Mild Net SavingsFinished Pounds


### The savings will vary a great deal by

vehicle segment. D Segment, E Segment and Large Full Frame vehicles will show the most dramatic change in material mix. 

## Changes by 2025 i n the body, bumper

and closure weight for the average NA light vehicle. The total weight savings is 400 pounds. This is just the weight savings in the body, bumpers and closures.

48 

## 2012 AND BEYONDTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com

2.65 5.62 6.93 8.73 10.3 16.3 65 110 150 180

0 50 100 150 200 250

1996 1999 2002 2006 2009 2012 2015 2018 2021 2025Pounds per Vehicle 

## Body, Bumper and Closures

9 16 19 27 27 30 35 41 48 55

0 10 20 30 40 50 60 70

1996 1999 2002 2006 2009 2012 2015 2018 2021 2025 

## Other Structural Parts North American Light Vehicle Aluminum Content

212 229 249 280 290 297 302 305 310 315

0 50 100 150 200 250 300 350

1996 1999 2002 2006 2009 2012 2015 2018 2021 2025 

## All Other Aluminum

224 251 275 316 327 343 394 456 508 550

0 100 200 300 400 500 600

1996 1999 2002 2006 2009 2012 2015 2018 2021 2025 

## Total 3.5% CAGR

49 

## 2012 AND BEYOND Aluminum body and structural components will lead growth in content.

Source: DuckerTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com



### 0 100 200 300 400 500 600 700Pounds 

## North American 51 MPG Case Results for Light Vehicle Aluminum Content



## 1977 2025 550 lbs.

Actual Values 50 Year Exponential Trend Line

50 

## 2012 AND BEYOND Aluminum content increase from 8% to 16% of curb weight is consistent with long term trend.

Source: Ducker 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% Aluminum Share Of Curb Weight 

## 16% 8% 0 100 200 300 400 500 600 700

2005 2010 2015 2020 2025 2030 Long Term Aluminum Content Trend Line 

## 300 lbs. 600 lbs. 3.5% CAGRTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

### More than the new CAFE rules are driving aluminum growth. History favors aluminum.

51

165 212 242 265 295 322 330 343 400 441 495 550

0 100 200 300 400 500 600 

## Aluminum Pounds per Vehicle History and Forecast

0 100 200 300 400 500 600 

### Pounds per Vehicle Trend Line Depends on 2018 Rule Review Actual Values Thru 2012 

## 2012 AND BEYOND

373 394 420 450 459 485 498 513 528 585 607 629 650 671

0 100 200 300 400 500 600 700 800 

### Aluminum Pounds per Vehicle Car versus Truck

Car Truck  H istorical trend predicts continued growth for aluminum content. This is not a “hockey stick” forecast. It is very realistic.  OEMS are convinced improving fuel economy creates a competitive advantage. They don’t want expensive alternative powertrains to be forced on consumers, but they see the commercial and political value of saving weight. Aluminum is the most cost effective and safe way to achieve significant weight reduction .Transportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

### The mix is slowly shifting to more cars, but aluminum use today and in the future will be 36% greater in light trucks. The average aluminum content for all the vehicles expected to be assembled in NA over the 2012-2025 time period is forecast to be 448 pounds per vehicle.

52 

### Billions of

Pounds 

## Total Aluminum Content Pounds Car vs. Truck

Car Truck 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 

## Car versus Truck Share of Total Production

Car Truck 10 9 8 7 6 5 4 3 2 1 0 

## Light Trucks
Passenger Cars Light Trucks Passenger Cars 2012 AND BEYOND

42.8 Billion Pounds 58.5 Billion Pounds 127 Million Units

124 Million UnitsTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com


###  The primary objective of this study was to determine a very accurate estimate of the aluminum content in the light vehicles to be assembled in North America in 2012. Ducker’s estimate is 343 pounds per vehicle in 2012 versus 327 pounds in 2009. The study also attempted to determine the most likely material mix for future North American light vehicles through 2025. All the factors affecting the future mix were taken into account, including technology, cost, material availability and most importantly the current and recently announced fuel economy regulations. A scenario for 2025 of 10% weight savings, 44% HEV penetration and a 2% average footprint reduction resulted in the achievement of a fuel economy of 54.5 MPG for cars and at least 46.5 MPG for light trucks. The primary sources of the weight savings came from the additions of aluminum and advanced high strength steels for mild, bake hard and HSLA steels primarily in the body and closures of the average vehicle.  Aluminum content is expected to grow at 3.5% CAGR over the next fifteen years in the continued quest for cost effective vehicle weight savings. Current aluminum growth is being driven by new applications for body, bumpers and closures. Thirty percent of all the hoods on the 2012 vehicles will be aluminum; saving 100 million pounds of vehicle weight. Future growth will be driven primarily by the continued conversion of steel to aluminum in these same applications. Advanced high strength steels (AHSS) are also replacing HSLA and mild steels in these applications. AHSS is initially a cost effective way to save weight. The problem is these steels don’t save enough weight. We added 250 pounds of AHSS to the base year 125 pounds in order to save a maximum of 80 pounds for the most strength driven components in the vehicle body. AHSS simply saves weight through gauge reduction. There is a design limit on how thin you can go on a component such as a hood and still maintain functionality. AHSS has the same density as mild steel. Aluminum on the other hand saves weight because it has a density of only one third that of AHSS. Even when you increase the thickness of the aluminum to meet the stiffness of steel, the aluminum parts only weigh half as much as the steel parts they replace. We added 225 pounds of aluminum to the average vehicle and saved 180 pounds with no change in part performance . Aluminum will be a significant contributor to the achievement of at least a 10% reduction in light vehicle weight by 2025.

53 

## 2012 AND BEYONDTransportation * CONSTRUCTION * INDUSTRIAL * materials * FINANCIAL ducker.com 

### The forecast of a 2025 light vehicle aluminum content of 550 pounds per vehicle is only slightly above the long term trend line, and quite achievable at a very reasonable direct cost of less than $500 per vehicle to the OEMs and their tier one suppliers.

54 

###  

### Aluminum will need to grow in content from 325 pounds in the NHTSA/EPA base year of 2008 to 550 pounds in 2025 in order to save 180 to 200 pounds of direct curb weight and 78 pounds of secondary curb weight . The average cost of direct weight savings was determined to be approximately $2 . 00 per pound of weight saved . The 78 pounds of secondary weight savings would help offset this penalty, but we did not place a value on the secondary weight savings in this exercise . This increased use of aluminum is absolutely necessary for a cost effective weight reduction in curb weight of over 400 pounds by 2025 . The weight savings from AHSS diminishes rapidly after you convert the safety cage and a few other parts . A few major OEMs have already reached this point in most of their vehicles . Increasing aluminum intensity is the next step for these OEMs .  

### Although adding 225 pounds of aluminum in less than 20 years is a very dramatic increase, North American OEMs have already added or are programed to add 250 pounds in the period 1990 to 2015 . The 3 . 5% CAGR needed to attain 550 pounds by 2025 is a conservative forecast in our opinion . 

## 2012 AND BEYOND1250 Maplelawn Troy Michigan 48084 PH. 248.644.0086 ducker.com 

# This concludes our report. Thank you . This presentation was prepared by Ducker Worldwide LLC . Opinions and estimates constitute judgment as of the date of this material and are subject to change without notice . Any interpretations derived from these findings are the sole responsibility of the client . Reproduction or external distribution of the contents of this report without the explicit consent of Ducker Worldwide LLC is strictly prohibited .

For over 50 years, Ducker Worldwide has enabled clients to navigate and thrive in a dynamic, global marketplace . Our unique and proven combination of custom market intelligence, critical thinking and strategic consulting create valuable opportunities that deliver critical results. For more information regarding our strategic services, expertise and to learn how Ducker Worldwide can help you, please contact one of our team members at 248

- 644

- 0086 or visit our website at www . ducker . com

55