The two companies plan to conduct further studies with the aim of concluding an agreement for the JV by the end of September 2014.

The JV is envisaged to produce and sell mainly aluminium sheet for automotive body panels, along with aluminium sheet for automotive heat exchangers. Operations would start in 2017. In the JV scheme, Kobe Steel will be responsible for production, quality assurance and business operations. Toyota Tsusho will undertake the important role of marketing the products. The JV’s equipment is anticipated to mainly cover downstream operations.

For the sourcing of the master coils to make the aluminium sheet, Kobe Steel is currently in talks with Wise Alloys, LLC. Wise Alloys, based in Muscle Shoals, Alabama, is a major U.S. producer of aluminium can stock for the beverage and food industries.

Corporate average fuel economy (CAFE) standards in the United States have become increasingly stricter in recent years. Cars will be required to achieve a 25% improvement in fuel efficiency by 2016, compared with 2011. By 2025, fuel efficiency will be required to double. On this background, automakers are rapidly taking steps to make lighter cars. One effective way is the increasing use of aluminium panel material. North American demand for aluminium body panels is anticipated to increase substantially from approximately 100,000 tons per year now to over 1 million tons in 2020.

Kobe Steel maintains more than a 50% share of the Japanese market for aluminium panel material. Since the 1980s, Kobe Steel has been providing total solutions covering materials development, analysis and design, and processing and joining technologies. Not only Japanese automakers, but American and European automakers as well hold Kobe Steel in high regard for its automotive aluminium products.

Utilising this strength, Kobe Steel is accelerating its global expansion to meet the growing demand for aluminium panel material. In June 2013, Kobe Steel announced that it had entered into a technical cooperation agreement with Germany’s Hydro Aluminium Rolled Products GmbH for aluminium sheet used in automotive body panels. In September 2013, Kobe Steel reached a decision to establish Kobelco Automotive Aluminium Rolled Products (China) Co., Ltd. to produce aluminium sheet for automotive body panels in Tianjin, China. Construction of the plant is underway with operations to begin in early 2016.

In addition, the manufacture and sale of aluminium sheet for heat exchangers by the JV is also under consideration.