Mitsubishi Aluminum Targets to Expand Auto Related Products

Mitsubishi Aluminum aims to expand the sales in growing business fields such as automobile related aluminium products under the severe managing condition including material cost expansion. The firm also seeks some new businesses including full commercialization of the magnesium business. Kunio Tagaya, executive officer of Mitsubishi Aluminum, explained the current business circumstances and the future vision to Japan Metal Bulletin.Mr. Tagaya said the price hike was unavoidable for aluminium products with extremely high price of primary aluminium ingot price, while concerned that the high price might slow the trend to introduce more aluminium parts onto automobiles. Mitsubishi Aluminum will gradually pass the increasing material cost on the selling prices, he said.Mr. Tagaya indicated the firm also aims to raise the rolling charge in order to cover surging production costs such as crude oil price. However, he said, the first priority is to pass primary aluminium ingot price rather than crude oil. The users might not accept too high price if the firm adds the total cost expansion on the selling price at once. He estimated the firm is suffering 600 million yen of cost expansion per year due to high crude oil price.Mitsubishi Aluminum aims to increase the sales of auto related products in its 3-year management plan to fiscal 2007 ending March 2008. Mr. Tagaya said 70% of aluminium extrusion sales are for automobile at Mitsubishi Aluminum and expected to increase the sales ratio more. Extrusion production is at full operation recently when the demand is also increasing for bumpers for autos and trucks. Aluminium plate demand is mainly for auto parts, he said, such as heat exchanger, air conditioner and interior materials.As to aluminium foil business, Mr. Tagaya indicated the consolidation is necessary among Japanese foil makers when aluminium foil market tends to shrink other than for capacitors. He expected the market condition becomes even severer for Japanese foil makers with inflow of cheaper imports from Asia and domestic 7 foil makers in Japan would become too much against the market size consequently. Mitsubishi Aluminum prepares for the consolidation in the future strengthening its own presence and managing power in the market.Mitsubishi Aluminum advances its magnesium business to expand the sales of heat resistant magnesium alloy products mainly for automakers and to improve its production technology of continuous casting for magnesium alloys. Mr. Tagaya expected the business could commercialize fully soon.