Fuel Standards Will Force Lighter Autos

The new rules certainly give makers of aluminum, carbon fiber and other lightweight materials something to smile about, analysts say, though the steel industry's piece of the auto-industry pie is likely to shrink.

Auto shoppers, meanwhile, can expect to pay a premium at dealerships when the new rules kick-in but the impact will be mitigated somewhat by fuel savings.

The new law says the auto industry must raise its fleet-wide fuel-economy average 40 percent in the U.S., to 35 miles per gallon, by 2020. Increased mileage requirements could begin as early as 2011.

"With new standards, historically the auto industry has responded by lowering the weight, which meant less steel and more aluminum, rubber and plastic," said Mary Deily, a professor of economics at Lehigh University in Bethlehem, Pa., who has studied the steel industry.

A 10 percent drop in weight yields roughly a 6 percent improvement in fuel economy, automakers and analysts said.

In order to fully achieve the energy bill's fuel-economy goals, however, automakers are looking at enhanced engine and transmission efficiency which already can be found in gas-electric hybrid vehicles reduced tire resistance and improved aerodynamics, says Alan Taub, executive director of research and development at General Motors Corp.

"The question is how to deliver this fuel economy with the best combination of technologies to deliver the highest value to customers," Taub said.

Today, steel accounts for about 60 percent of an average vehicle's weight in the U.S., down from a generation ago when much more of the metal was used, executives and analysts said. Still, the popularity of trucks, minivans and SUVs has caused the average vehicle weight to rise by more than 25 percent, to about 4,100 pounds, over the past 20 years, helping steel providers.

Even so, the percentage of aluminum in cars has been on the rise for decades since the last boost in fuel economy standards. Alcoa Inc., the country's largest aluminum maker, sees an even greater opportunity ahead.