When The Wall Street Journal first reported that Ford's (NYSE:F) all-new F-150 pickup would be made out of aluminum, many observers weren't sure what to think.
Sure, it made sense from a fuel-economy perspective, as lighter trucks get better mileage. But there were some big questions: Would the new trucks hold up to hard use? Would they be too expensive? Would they be hard to repair? Could Ford get enough aluminum to make all the trucks it needed -- over 60,000 a month? Could Ford's factories make aluminum trucks fast enough?
We still don't know how much the new trucks will cost, as Ford hasn't yet announced pricing. But since the new F-150 was officially revealed in January, one by one, the other questions have been answered. Ford's new truck is made from a military-grade aluminum alloy that has held up just fine in very rough testing, the company says. Ford has helped dealers and body shops get ready to fix the aluminum trucks. Ford's manufacturing guru is confident that the company's assembly lines will be ready to go at full speed. And yes, they'll have ample supplies of aluminum: Heavyweights Alcoa (NYSE:AA) and Novelis have stepped up to make sure of that.
Now, as Motley Fool senior auto specialist John Rosevear explains in this video, Ford's confidence is inspiring others: As fuel-economy regulations around the world continue to tighten, more and more automakers are looking at aluminum as a way to improve their products' gas mileage.
A transcript follows the video.
John Rosevear: Hey, Fools. It's John Rosevear, senior auto specialist for fool.com. There are more and more signs that aluminum is the hot new material in the global auto business.
Luxury-car makers have been using aluminum for body panels and some structural parts for years, Audi and Jaguar have been using it on high-end models for a while, and of course, Aston Martin was making body panels out of aluminum for years, but it's really Ford's move to start making its F-150 pickups with aluminum bodies that is setting off a wave of activity in the auto industry, according to reports.
Ford says that the 2015 F-150's aluminum body panels will make the new trucks up to 700 pounds lighter, depending on configuration, and that in turn will improve handling, towing capacity, and, most importantly for Ford, fuel economy.
Ford and the other Detroit automakers have been looking hard for ways to preserve their ability to make and sell lots of very profitable full-sized pickup trucks as government fuel-economy standards get stricter and stricter, and Ford is making a very, very big bet that its pickup fans -- and the businesses that depend on Ford pickups -- will like what they see when they roll out the new aluminum F-150s this fall.
But the significance for the auto industry is in the manufacturing here. It's one thing to make a luxury car like an Audi A8 out of aluminum. The production volumes are small and the price is high, there's lots of room to do things with some hands-on techniques, and so forth.
But a few weeks back I talked to Ford's North America chief, Joe Hinrichs, about the new trucks, and he helped me understand why this is a completely different deal.
Hinrichs came up the ranks at Ford as a manufacturing expert, and he points out that nobody has ever tried to build aluminum body vehicles in these kinds of volumes. The F-150 is Ford's best seller. They have two factories each building 60 trucks an hour. Ford and its suppliers had to come up with new tooling and new machines and new techniques to build these trucks.
Now that they're on the verge of showing that it's feasible to bld a very high-volume product out of aluminum, a lot of other companies that could use the fuel economy boost that a lighter aluminum body would give their products are starting to move in that direction.
A new report from consultants Ducker Worldwide says that 18% of all vehicles in North America could have aluminum bodies by 2025. And it's easy to see how that could go. If the new F-150 is a success, it won't be a surprise to see Ford move to aluminum construction on its SUVs and so forth, and it wouldn't be a surprise to see General Motors (NYSE:GM) and Fiat Chrysler (NASDAQOTH:FIATY) head in the same direction, GM has already hinted that they're considering aluminum for their next-generation Chevy Silverado that will appear late in the decade.
So this is one of many coming things in the auto business. We talk about hybrids and electric cars, but there are still gains to be had from internal combustion-powered vehicles, and reducing their weight is one big way to get those gains. Thanks for watching.
John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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