•Novel sustainable production approach developed for Aluminum Matrix Composites•Scrap Aluminum Alloy Wheels used as matrix to develop the Novel MMC’s•X-ray diffraction analysis does not reveal any new phases formed in the composites•Taguchi- GRA approach adopted for optimizing the stir-squeeze casting process•High values of ultimate compressive (433 MPa) and tensile strengths (133 MPa) achieved This work focuses on the processing, properties, microstructure, and optimization of squeeze and stir casted samples of scrap aluminum alloy wheel aluminum matrix composites reinforced with alumina. The Taguchi-Grey relational analysis method was used to optimize the stir and casting process parameters, namely, squeeze pressure, squeeze time, die preheating temperature, and stirrer speed. These stir-casted composites were analyzed based on their microstructure, hardness, tensile strength, compression strength, and wear/tribological performance. Adding alumina to an aluminum matrix improved the mechanical and tribological properties. The results showed that out of nine experiments (L1–L9) obtained from Taguchi analysis, experiments L5 and L6 exhibited the best mechanical properties. Microstructural observations revealed different morphologies in the distribution of Al2O3 and porosity in the Al matrix, depending on the process parameters. Finally, the Taguchi-GRA method was used to find the optimized process parameters and was experimentally verified. The optimized sample (M2) showed the lowest porosity (5.29%) and significantly higher ultimate compression strength (433 MPa). However, it exhibited slightly lower hardness and ultimate tensile strength when compared with the L6 and L5 samples, respectively.