<p>Commercially available Al-Si-based hot-dip coatings has widespread applications in automotive hot forming steels owing to its high-temperature oxidation resistance. However, these coatings require compositional and microstructural modifications to address issues related to poor formability and sacrificial corrosion protection. In the present study, a new Al-Si-X alloy composition is designed based on CALPHAD approach followed by coating of the alloy on steel. Characterization of the as-dipped and heat-treated coated specimens were performed using SEM and XRD to study the phase formation in coated microstructure including Fe-Al intermetallics at the substrate–coating interface, Al-rich primary phases, Si-rich eutectic and Mg₂Si at the coating overlay. The as-dipped coating is further subjected to high-temperature deformation tests and two types of crack formation within the coating are reported during hot deformation operation. The crack type was primarily depended on temperature–time schedule of austenitization operation. This is mainly due to increase in overall Fe-content in the coating. It is also observed that Mg₂Si phase in the heat-treated coated specimen contributed toward a more active corrosion potential indicating sacrificial ability. The barrier protection of the alloy coating post-hot deformation was found to decrease with the micro-cracks acting as conduits for ingress of corrosive ions.</p>