Steady Growth

Although Liqui Moly competes against big name companies like Shell, BP/Castrol, Chevron and ExxonMobil, it has nibbled away at the market and was recently selected the most popular brand of lubricant by the readers of Auto Zeitung, a leading German auto magazine. While Germany remains its main market, international sales are growing. Liqui Moly now supplies its products to more than 110 countries.

Over the last ten years, Liqui Molys gross income tripled to 260 million in 2013. In 2006, the company acquired majority ownership of Mguin GmbH & Co. KG in Saarlouis, Germany, its supplier of motor oil. Mguin grossed 155 million itself in 2013 in sales of lubricants for cars, commercial vehicles and industry.

Liqui Moly doesnt just have its origins in Germany, its sole production facilities are there. The motto Made in Germany is a quality guarantee we live up to day after day, said Managing Director Ernst Prost. We win favor with the high performance of our products and not with price cuts.

Liqui Moly credits proximity to its customers as one reason for its success. If a customer needs a product that isnt yet included in the range, it will be developed and made for them, Prost said.

In the beginning, we focused on the do-it-yourself market, said Marketing Director Peter Bauman, and sold our engine oil additives through super markets, then in home and garden centers. At the end of the 1970s, Liqui Moly introduced its own motor oil brand, containing molybdenum disulfide.

In the following years, we introduced more and more motor oils with different additive packages and viscosity grades, including mineral oils and synthetics, Bauman said, and we switched from an additive company to a motor oil company. Eventually, Liqui Moly began shipping these products worldwide.

Compared to our competitors, we have a completely different philosophy, Bauman explained. We are much smaller in terms of employees and financial strength, but we try to stay close to our customers and work with each of them individually.

Liqui Moly has about 100 sales people working in Germany, who make daily visits to workshops, dealerships and garages, not only to sell, but to teach as well, Bauman added. But while Liqui Molys salespeople are visible to their customers, ordering, logistics, billing, etc. are handled through wholesalers. This is a special system that has brought us a lot of success in Germany. All our competitors sell directly to customers, and dont use wholesalers.

Bauman said that the company thought about production outside Germany, but then we would be in direct competition with local producers, and we would lose the benefit of our exclusive German production. Liqui Moly purchases all its raw materials, Bauman said, and all our products are blended in Germany and shipped to international markets. While this arrangement results in a disadvantage with regard to pricing, he noted, We have the credentials that end users value; namely, approvals from all major car manufacturers and the Made in Germany label. So they are willing to pay a little more for our products.

Liqui Moly has found that its engine oil approvals from German car makers are an advantage not only in Germany, but also in international markets. We have very close relationships with German car manufacturers, so we are always up to date on the latest engine developments and requirements, Bauman said. In many countries, people do not trust local production, but they trust German quality all over the world.

The companys biggest market outside Germany is Russia, which it entered only 15 years ago. Today, we are growing in developing countries like China and India, where an increasing number of people can afford German cars.

New Product Development

David Kaiser, head of the R&D Department explained, We not only do research and development work, but also technical service for our customers. Customers can call our telephone hotline with questions about products or problems they have. Liqui Moly also provides a variety of services for its customers, including oil analysis to help them find the optimal product for their application.

Kaiser said that a lot of product development is initiated by the sales force identifying a problem. For example, our sales force recently identified a problem with passenger cars equipped with diesel particulate filters, he said. Some drivers dont drive far enough for the filters to reach the automatic regeneration temperature. As a result, the filters can clog after as little as 12,000 kilometers, compared to the expected life of 100,000 km and more. Replacement particulate filters can cost 1,500 to 3,000, Kaiser said, so there was a real need to develop a way to clean the filters manually.

In response, Liqui Moly developed a filter cleaning kit that service centers can use to dissolve deposits quickly. It costs only 150 to 300 to service the filter, which is a great savings to the driver, said Kaiser.

In conjunction with this product, Liqui Moly developed a fuel additive that the company claims not only reduces soot formation but also reduces the temperature at which soot burns. As a result, the particulate filters regenerate at a lower temperature.

Another problem is that modern diesel engine oils contain low levels of ash. While this is fine for Europe and the United States, developing countries typically use high-sulfur diesel fuels, which cause high acidity in the oil when burned. We developed a TBN booster that neutralizes the acid and allows the oil change interval to be extended by about 30 percent, Kaiser said.

With the recent emphasis on fuel economy, Liqui Moly has performed a lot a research on friction modifiers. We have a friction modifier based on boron nitride called CeraTech. It consists of a very fine powder that adheres to mating surfaces to reduce friction and wear, especially during cold start. Other friction modifiers are based on tungsten disulfide and molybdenum disulfide.

In developing new engine oil products, Liqui Moly has installed an SRV tester from Optimol Instruments. The instrument integrates both oscillating and rotational movement in one test for evaluating friction and wear. This allows us to simulate engine operating conditions in a simple laboratory test and evaluate a new product in just a few hours, Kaiser said.

Product Range

Liqui Moly products include engine oils, additives, and vehicle care and service products. Our engine oils have a wide range of permits from German car manufacturers such as Mercedes, BMW, Audi and Volkswagen, said Bauman, and also from foreign producers like Toyota and Mitsubishi, or they meet the requirements of those manufacturers. A manufacturer permit means that the oil fulfills certain minimum requirements and that it has been successfully tested by the car manufacturer.

Liqui Moly also supplies lubricants to industrial customers as well as a range of products for commercial vehicles, motorcycles, boats and garden machinery. Finally, the company holds regular training sessions in workshops to teach service personnel how to apply its products, Bauman added.

Future Strategies

Bauman said, We are growing extremely quickly. Germany is our largest market with about 50 percent share. But if you look at the 109 other countries, we are growing quickly outside Germany.

Liqui Moly has branches in Portugal, South Africa, and the United States. In all other places, it works with local importers. We look for companies with an existing distribution network and relationships with customers that deal in spare parts for German cars or with garages that mainly service German cars, said Bauman. And because of the quality of our products, we are attracting the attention of larger wholesalers in the countries we serve.

According to Liqui Moly researcher Oliver Kuhn, engine downsizing will nearly triple the load on the oil due to three factors. First, engines will run at higher speeds. Second, downsizing reduces the quantity of oil in the engine by 30 to 40 percent, so the oil is subjected to greater stress. Finally, the oil never has a chance to rest and cool down.

All these factors lead to the oil aging more quickly, Kuhn observed. Moreover, in downsized engines, the oil has to withstand particularly high continuous loads, be more resistant to aging and have high resistance to wear. Therefore, he added, the friction modifier plays a very important role.

Mineral or synthetic blended oils cannot offer the performance required by downsized engines, Kuhn continued. With these oils, wear increases and their performance characteristics are depleted long before the next oil change. He then explained two trends affecting the future development of motor oils.

Oils of the future will have very low viscosity…to reduce fuel consumption. [However], low viscosity oil also means a thinner coating of lubricant on the surfaces, Kuhn said, so higher performance additive packages will be required to maintain this thin film of oil.

Kuhn also said future oils will be more highly customized. This [trend] started decades ago as automobile manufacturers…began developing their own oil specifications, he noted. The time is long past when a single type of oil will be suitable for all engines. This trend…will continue, making life more complicated for garages, dealers and drivers.