STEELING A MARCH

The Big Boys of steel are pushing the pedal to drive the future of mobility

- ISHITA AYAN DUTT & SOHINI DAS

Steel was the most common raw material when Henry Ford's Model T first rolled off in 1908. More than a century later, it remains unchanged for the automotive industry.

The success of Ford's Model T, credited with "putting the world on wheels" was, in part, attributed to the use of the lightweight, highstrength steel frame. In the years that followed, the alloy has had a significant presence in automobiles.

The Indian automobile industry, the third largest in the world, is poised to take a leap. In the financial year 2023-24 (FY24), Indian carmakers touched a new high with 4.23 million passenger vehicles sales. According to industry estimates, it could touch 8 million by the end of this decade.

Riding on the growth of the industry are steel companies eyeing higher margins and prestige.

Badge of honour

Considering the rigorous approval process followed by carmakers, only a handful of steel companies have the capability to supply specialised grades of steel in India. Most of the demand is met by the players who make steel from scratch, like Tata Steel, JSW Steel, and ArcelorMittal Nippon Steel India (AM/NS India).

Then comes Posco and some long product producers.

Of the total 136 million tonnes (mt) steel consumption in India, a small chunk of 8-10 per cent is by auto and auto ancillary industries. However, in terms of quality, the segment supply ranks in the top quartile. It's also a high-margin business.

More than 60 per cent of the raw material in a vehicle is steel.

Gearing up

As automakers rev up to make good the 'India story', the Big Boys of steel are pushing the pedal to drive the future of mobility. From setting up cutting-edge facilities to cater to the domestic market and building capabilities of global standards, the action is building up.