Petroleum, United States
Petroleum, United States

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Glenn T.F.,Petroleum Trends International
Lubes-n-Greases | Year: 2011

When buying engine oil for passenger cars, a customer's only basis of the quality and integrity of the product is on factors outside the package. These include brand recognition, performance claims, packaging, service, price, and even the personalities and spiels of sales people at retail outlets like Walmart and Pep Boys. Thus, automotive engine oil is considered as a "blind item", which means almost everything about product quality and integrity is on the inside of the container where you cannot see it. As a result, buyers have to make decisions about quality based on factors outside the package, as well as the cost. The relationship of lubricant cost with quality is presented. Higher priced engine oils typically sport brand names familiar to consumers. This can be an indicator of quality because building a recognized brand takes considerable time and money and often carries with it a brand promise. Brand promises represent what the brand stands for. And in many cases, these promises come at a higher cost because they are based on decades of earning a reputation as a supplier of consistent, quality oil, which in some cases is warranted against failure.


Glenn T.F.,Petroleum Trends International
Lubes-n-Greases | Year: 2011

The first big news about automatic transmission fluid (ATF) came in 2006 when GM discontinued licensing its trademarked Dexron-III fluid. A few months later, Ford announced it would retire all Mercon licenses, effective June 2007. Instead, its principal ATF for service fill would be licensed under the Mercon V trademark. While GM and Ford each had reasons to upgrade their specifications to a level that drove a wedge between their ATF performance targets, lubricant marketers, fast lubricants and other installers had different thoughts. They had motive to keep these "universal" fluids alive, including the logistics and added costs to blend, house and handle separate ATF. Secondly, both OEMs' current ATF required the use of more expensive base oils and additives. This meant a significantly higher cost and price for the new fluids, not just for new cars but also for millions of vehicles already on the road. As a result, when GM and Ford drew the final curtain on Dexron-III and Mercon licensing, the industry quickly pulled open another curtain on unlicensed products. These products are labeled as "D/M", "Dex/Merc", "MD-3" and other names suggestive of the old Dexron-III/Mercon fluid. In addition, other products entered the market as "ATF" or "Multi-Purpose ATF". In most cases the labels prominently state the product is formulated to meet the requirements of Dexron-III and Mercon fluids. As a result, rather than fading out, unlicensed replacements for Dexron-III/Mercon have upstaged Dexron-VI and Mercon V to the point where they enjoyed nearly 50% of the ATF aftermarket in the US in 2010. Although old Dex/Merc type fluids remain the primary aftermarket ATF, demand for these fluids shrinks with every new car sold.


Glenn T.F.,Petroleum Trends International
Lubes-n-Greases | Year: 2010

GM's new global specification for passenger car engine oils, trademarked as Dexos1, represents a leading OEM's clear and unprecedented departure from the API Service Categories that have guided both buyers and sellers of engine oils for the years. GM advised its dealers that their net price for GM Dexos1 synthetic blend oil will range from $9.95 to $11.52/gal, depending on package size and programs bundled with the purchase. While this is lower than some marketers expected compared to leading brand synthetic blends, the announcement raised additional questions. Questions about the cost and price of Dexos1 often segue into others that are just as important, and maybe more challenging to answer. GM advised dealers that in the event the required oil is not available, they may substitute SAE 5W-30 engine oils displaying the API Starburst symbol in all GM 2011 model-year vehicles requiring the use of Dexos1 (except Corvette and Camaro SS). If Dexos1 is not available for the 2011 Corvette or Camaro SS, a full synthetic such as Mobil 1 SAE 5W-30 is an acceptable substitute. In both cases, these substitutes are acceptable until dexos1 availability is pervasive.


Glenn T.F.,Petroleum Trends International
Lubes-n-Greases | Year: 2010

Dexos is the trademark for GM's new global engine oil specification. Dexos1 (which GM likes to show as "dexos1") is formulated to provide owners of GM passenger cars with engine oils that offer several advantages over current ILSAC GF-4/API SM oils. Dexos1 will significantly outperform GF-4. The specification is so advanced that it also will surpass the ILSAC GF-5 and API SN upgrades.


Glenn T.F.,Petroleum Trends International
Lubes-n-Greases | Year: 2010

The Petroleum Trends International indicates demand of lubricant in 2009 dropped almost 21% from 2008. A look at both cyclical and structural changes affecting demand is required. Cyclical changes typically have the most significant influence on the demand. Recession is one of the most painful examples of how economic cycles impact demand. A prominent example of structural change n the industrial lubricant segment is offshoring of manufacturing. Consolidation is another example of a structural change that affects lubricant demand.


Glenn T.F.,Petroleum Trends International
Lubes-n-Greases | Year: 2010

API Group III base oils are manufactured via several processing routes with the use of three types of feedstocks. Due to these processing and chemical variations, the properties of Group III will differ. A discussion on API Group III base oils covers engine oils made from such, with emphasis on their engine sequence tests; API's position that it can only modify its base oil interchange guidelines as data supporting new guidelines are brought forth; sensitivity of engine and bench tests to the differences in Group III; cost of testing and approving additive packages; and models that can help bring costs down and assure the quality of lubricants.


Glenn T.F.,Petroleum Trends International
Lubes-n-Greases | Year: 2010

A discussion on whether or not API Group III base oils are fungible covers inventory management concerns; technical and commercial arguments; engine oil formulations; properties of fungible base oils; licensing an engine oil with API; complexities related to question of fungibility; interchange guidelines; and the lack of data presented to API in support of Group III interchange.

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