Aluminium’s revolution in

the automotive industry

Dr. Erwin Mayr, President, Novelis Europe
Metal Bulletin Conference, Munich Mai 20th 2015
“Excess weight kills any self-propelled vehicle…
Weight may be desirable in a steam roller but nowhere else”
- Henry Ford 1924

2
Alu FRP demand estimated to grow by 12m tons from 2010 to 2020

Global FRP Aluminum demand

M tons

35 30
+12
30
24  Aluminum FRP demand
25 to grow 12 Million tons
18
20 over the current decade

15  Average global annual

growth rate at 4%
10
 Young growth industry
5
0
2010 2015 2020

Source: Novelis industry analysis

3
FRP demand in Automotive is rapidly catching up with Can

2010 2015 2020

4.3 Mt 5.3 Mt 6.2 Mt

0.2 Mt 1.0 Mt 2.2 Mt

Source: Novelis industry analysis

4
Aluminum sheet still small in automotive … with a long run way

80 Mt Steel, 2015

2.2 Mt Aluminum FRP, 2020

1Mt Aluminum FRP for cars, 2015

Source: Wood Mackenzie

5
Adaption in mass market cars leads to strong growth in the future

Global FRP Aluminum demand in Auto Porsche SUV

M tons
C-Class
C-segment car
S-Class
2.5
2.2
Audi Q7
2.0 Range Rover E-Class

BMW 5/7 series

1.5 Audi A8
Ford F150

1.0
1.0
Audi A8

0.5 Jaguar XJ
0.23
0.06
0.0
2005 2010 2015 2020
Source: Novelis industry analysis
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Primary drivers for change to Aluminum in Automotive

Regulations
Enforcement of emission reductions
2012 2025

Performance
Customers expecting better specs
Light-weighting

15 Fuel economics
Customers wanting to pay less for gas

0 30
MPG
45 Environmental sensitivity
Desire to reduce ecological footprint
Efficiency

7
Regulations are tightening in key markets

Allowed CO2 emissions for cars

Grams of tailpipe CO2 emission per kilometer
normalized to NEDC test cycle

USA (cars)  Enforced reduction of

207 EU ~45% in both, USA and
EU between 2000 and
172 177
2021
140  Same trend to be
119 found in other
95 countries such as
Brazil, China, Japan
 Exports force producers
to comply with most
stringent regulations

2000 2010 2021

Source: ICCT, Wood Mackenzie

8
Main growth for Auto Aluminum demand in North America

+90%
+200% 850
+90%
1′126
450 255
135

373 Asia
Europe Incl. RoW

North
America

Auto sheet demand 2015 (blue) and 2020 (grey), in kt

Source: Novelis industry analysis

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Surging demand in the US due to regulatory pressure

Demand and supply of Auto FRP Capacity

kt, North America
Demand

1′200

800

400

0
2010 2015 2020

Source: Novelis industry analysis; Wood Mackenzie

10
Investments in place at or above European demand

Demand and supply of Auto FRP Capacity

kt, Europe
Demand

1′000

800

600

400

200

0
2010 2015 2020

Source: Novelis industry analysis; Wood Mackenzie

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Good business can be bad for business

# of competitors/
Number of entrants / margins

capacity

Margins

Time

Source: Credit Suisse

12
Innovation becoming increasingly important to differentiate

Strength / crash
 Advanz™ s600: full crash 250 MPa
Forming  6xxx: 300-350 Mpa semi-crash
 Advanz e200 for high forming skin
 Tailored properties blanks
applications, e.g. bodysides
 Advanz Fusion e200 for high forming
applications, e.g. door inners

Joining
 Full family of remotely Recycling
weldable alloys  Increasing recycled content in all
‒ Advanz e200 alloys (reducing footprint and cost)
‒ E170  Circular material flows in closed
‒ HS6xxx loops
 Multi material joining steel/alu  World-class scrap sorting technology
 Process and EOL recycling

13
Bodyside Evolution in Aluminum at JLR

 One piece Advanz™ e170 bodyside

the largest single aluminum automotive
body panel in the world to date
 Simple concept which brings weight and
costs saving

Source: JLR presentation, Eurocarbody 2012, R. Lloyd, G. Moyce, S. Black, M. Rickards

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Advanz™ c300 - Crash Energy Alloy

Compared to previous 5754 equivalent part

 20% Weight save achieved – circa
6kg per vehicle
 9% Cost save per vehicle
 12’000 tons CO2 reduced from annual fleet
tailpipe emissions

Source: Novelis R&T

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Novelis Innovation & Technology Leader

Goettingen, Germany
 Global R&T, Can & Specialties
 Plant Support
 Product Development
Spokane, WA
 Molten Metal Research
 Plant Support

Kennesaw, GA
 Global R&T
 Plant Support
 Product Development
 Technology Development Ulsan, Korea
 Global R&T
 Tech. Support
 Plant Support
 Product Development

Sierre, Switzerland
 Global R&T, Automotive
 Plant Support
 Product Development

16
Novelis closed loop recycling (“mining-free Aluminum”)

1 Production 2 End-of-life closed loop

closed loop

17
Evolution of recycling content at Novelis

Recycled content at Novelis

Percentage

49

46

Long-term target
43
of 80% recycled
content for Novelis
39 worldwide

33

FY11 FY12 FY13 FY14 FY15

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Novelis Nachterstedt – Aluminium Recycling Center

 Largest aluminum recycling facility in

the world – 400kT p.a.
 New technology to handle wide variety
of scrap types will become the
technology standard for future plants

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How is Novelis Nachterstedt different?

SHREDDING SORTING MELTING

20
The World’s Largest Recycling Network casted 1.6 Mt in FY15

North America
Europe
Oswego, NY
Nachterstedt, Germany
Berea, KY
Latchford, UK
Greensboro, GA
Norf, Germany
Pieve, Italy

Asia
Yeongju, Korea
Ulsan, Korea

South America
Pinda, Brazil

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 Novelis is investing world-wide to provide adequate auto capacity

Novelis Global

North America Europe 900

Asia
420 360
250
180 120
15
445
3 production lines 1 production line
4 production lines  SOP 8/2014
 2 lines in operation
 2 lines recently completed since > 10 years
(~240kt final output)
 Nachterstedt line SOP
 1 line in construction mid-2015 on track
operational early CY2016 (120kt)
(~120kt)
2014 2016e
Novelis Automotive BiW capacity 2014 / 2016 (estimate), in kt

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 Novelis is serving its global customers from around the world

Sauerland, Germany
Norf, Germany
Nachterstedt, Germany

Latchford, UK
Göttingen, Germany
Berea, Kentucky
Oswego, New York
Yeongju, S.Korea
Pieve/Bresso, Italy
Fairmont, W. Virginia Ulsan, S. Korea

Terre Haute, Indiana Sierre, Switzerland

Logan, Kentucky Chanzhou, China

Greensboro, Georgia

Alcom, Malaysia

Pinda, Brazil

Building &
Automotive Consumer & Industrial
construction
Packaging Beverage can

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