TOKYO -- Toray will supply carbon fiber to BMW, with plans to double production capacity at a Mexican plant.
The German automaker is spearheading efforts to increase the material's use in car production as a means of improving fuel economy. In preparation, the Japanese company will spend about 30 billion yen ($246 million) on upgrading a Mexican plant of U.S.-based Zoltek, which it acquired this year to make automotive carbon fiber.
The two companies are currently hammering out details of the arrangement, which will most likely involve Toray supplying BMW directly.
Carbon fiber composite materials, which are 10 times stronger than iron and one-fourth as heavy, are increasingly used in aircraft to bolster fuel efficiency.
For automobiles, applying carbon fiber materials to some 20% of a vehicle's body would reduce weight by about 30%. But due to high costs, many automakers have used the material in only a handful of parts.
Last year, BMW became the first major automaker to apply the material to the frame of a mass-produced car, putting it in a new electric vehicle. The German automaker now plans to use the material in its mainstay high-end products as well, as emissions regulations tighten worldwide.
The carmaker has been purchasing the material from a compatriot in which it invests. But with the need for a bigger supplier, it homed in on industry leader Toray, which commands a 32% market share in carbon fiber.
By partnering with BMW, a pioneer in the material's application, Toray stands to gain the footing necessary to take a leading role in the growing automotive carbon fiber market.
The market for carbon fiber materials for automotive and other applications excluding aircraft is expected to reach about 100,000 tons in 2020.
The Japanese company aims to triple sales in its carbon fiber segment from fiscal 2013 levels, eyeing 300 billion yen around 2020.