How Does the Metals Market Affect the Car Industry?

Car companies use an array of different metals and metal alloys to make their cars more efficient, light, and safe. Aluminum is used in a variety of different car classes, but it is used mostly in sportier vehicles to save weight and increase performance. Steel is the most used alloy in the industry, and the chassis and engine block are where it really improves strength and stiffness. 



Since aluminum and iron are the two most abundant metals on earth, people should not worry about running out of these any time soon. Without these two metals and metal alloys, there would be no car. 

To put these metals in their vehicles, car companies have to buy their metals from somewhere else. The prices of these metals, which are commodities, fluctuate with the demand and supply of the said metal. If the cost of the alloy or metal rises, the price of the car which is made with the metal or metal alloy inherently rises, and vice versa with the fall of the cost. 


New tariffs on these metals and other metals that our country mines very little of, today, have increased the price of vehicles and has caused some American companies, in particular, General Motors, to lay off thousands of workers. These tariffs have also contributed to some sedans that General Motors makes to stop being made where all of those workers got laid off. According to an article written by Jeremy Scott Diamond and other writers from Bloomberg, the tariffs on these metals and car imports have decreased profits for Toyota and forced Volvo to increase car prices to compensate for the higher metal prices.  

We only hope that these higher prices from the tariffs don't drive the prices of cars through the roof. This may not affect the cost of the vehicle, though, because most of the cost amount of an automobile is due to its performance, brand name, and labor.