POSCO, the nation’s top steelmaker, is stepping up its efforts to expand its auto steel business for global automakers.

The steelmaker said Monday it plans to open a technical service center in Detroit, where the U.S.’ top three automakers run their production line, within this year.

“We expect the center to strengthen customer services for U.S. auto giants,’’ a company spokesperson said. 

POSCO’s plan to enter the U.S. auto city comes after chairman Kwon Oh-joon stressed the importance of the company’s auto steel business for its profitability at its annual investor relations session last month.

“The auto steel business has become the biggest contributor to the firm’s profitability and so the company will put priority on the auto sector,’’ he said.

POSCO produced 8.3 million tons in auto steel plate production in 2014 and was ranked third after ArcelorMittal in Europe and Nippon steel & Sumitomo Metal in Japan.

Facing growing competition from Hyundai Steel, POSCO’s auto steel business has been going abroad to offset falling sales to Hyundai Motor Group. 


As of 2014, POSCO recorded 70 percent of auto steel sales from overseas clients, including global carmakers such as Volkswagen, GM, and Toyota.

For further growth in the auto steel business, POSCO bets on growing demand for its own advanced high strength steel products and magnesium plates for future cars.

Global automakers are seeking lighter but stronger materials for future cars, pressed by higher standards in fuel efficiency.

The AHSS is one such material within steel. According to the Research and Markets, a global market information provider, the AHSS materials market is expected to reach $22 billion by 2019.

”An AHSS supply deal with a Japanese automaker is imminent,’’ a POSCO official said.

Beyond steel products, the steelmaker has also invested in developing lighter magnesium plates for cars.

The reputation of the new material, which competes with aluminum, is taking shape among global carmakers.

Renault Samsung used POSCO’s magnesium sheets to form the roof of its concept car Eolab, which is currently on display at the Seoul Motor Show 2015. The new material sheets are also applied to the roof of the high-performance sports car Porsche 911 GT3 RS.

By Seo Jee-yeon (jyseo@heraldcorp.com)