Alcoa Plans to Expand its Tennessee Plant on Demand for Lightweight Metal for Vehicles image

US aluminum manufacturer Alcoa plans to expand its Tennessee plant due to increasing demand for lightweight metal in vehicles.

Alcoa will invest $275 million in the following three years in its Tennessee plant to increase production of lightweight metals. In September 2011 the company announced it will spend $300 million to increase the automotive-products capacity at its Davenport plant, Iowa, a project which is to be completed by the end of this year.

Last year Alcoa had to close its smelter in Tennessee due to the curtailments which cut smelting capacity by 531,000 metric tons annually. Yesterday, April 2nd, the company said it is considering making further 460,000 tons of reductions in the following 15 months.

Analysts predict that this year US automakers will sell the most vehicles since 2007, as sales increased 6.9% through April to 4.97 million units. GM plans to reach a 15% weight reduction of its vehicles by the 2016 model year and Ford aims at taking between 250 to 750 pounds (113 to 340 kilograms) from each of its refreshed models.

Automakers are struggling to make their vehicles lighter to comply with the average fuel efficiency regulations of 54.5 miles per gallon (23.2 kilometers per liter) by 2025.

Source: Bloomberg