According to Gulf estimates, diesel engine oils account for 29 percent of Indias annual lubricant demand of 1.65 million metric tons (not including process oils). Thats significantly larger than the volume for any other category of vehicles. Motorcycle oils is second with 11 percent of the market, followed by just 5 percent for passenger car engine oils. Other automotive lubricants accounted for 20 percent, and industrial lubricants the remaining 35 percent.

Indias diesel engine oil market is spread relatively evenly across performance categories. Twenty-four percent of the segment meets API CD or CF specifications, both of which have long been obsolete in developed nations. Sixteen percent are CF-4, a step up from CF, while 26 percent are qualified for both CF-4 and Mercedes Benzs 228.1 standard. Nine percent are qualified for CG-4, CH-4 or Volvos VDS-2, while 10 percent meet CH-4, CI-4 Mercedes Benzs 228.3 or VDS-3. Only 3 percent of the segment is CI-4 Plus oils.

Monogrades make up 13 percent of the nations diesel engine oils. Forty percent are 20W-40 oils, and 44 percent are 15W-40.

There is significant interest on the part of operators to extend drain intervals, Rao said. They want to reduce the amount of time that vehicles spend out of service.

In the early 1990s, a typical drain interval for commercial vehicles in India was 8,000 kilometers. Today, some operators achieve 10 times that much. To illustrate the potential impact of an engine oil, Rao showed the intervals recommended for oils of different specifications. Tata Motors recommends intervals of less than 20,000 km for city driving and 35,000 km for long-haul driving when using CH-4 oils or oils that meet Volvos VDS-3 specification. If CI-4 Plus oils are used, the manufacturer recommends intervals of 40,000 km for city driving and 60,000 km for long-haul. Ashok Leyland recommends intervals of 40,000 km for city and long-haul driving when using CI-4 or VDS-3 oils. Its recommended interval doubles for vehicles filled with its proprietary engine oil.

India has not yet adopted fuel economy mandates for commercial vehicles. Rao suggested that may happen in the future, but in the meantime, operators of diesel vehicles are already beginning to demand better fuel economy.

Fuel is a major cost for them, so improving fuel economy can make a significant difference in their profitability, he said. Rao noted that switching to lighter oils is one of the main ways that engine oils can improve fuel economy. But he added that reducing viscosity can eventually risk damage to engine parts if formulators dont take other steps to ensure engine protection. The future focus is on CO₂ reduction and fuel economy without compromising engine durability.

India does have regulations limiting vehicular emissions of air pollutants. India currently imposes Bharat stage IV limits – equivalent to the European Unions Euro IV standard – on diesel commercial vehicles in 13 cities and intends to extend the regulation to 50 more cities in 2015. The Bharat stage III standard applies to the rest of the country.

Rao said requirements will probably be strengthened in the future and that commercial vehicles will need additional emissions control technologies in order to comply. Most manufacturers of light commercial vehicles meet current requirements using exhaust gas recirculation or EGR plus diesel oxidation catalysts. Most medium-sized commercial vehicles use a combination of EGR plus DOC and particle oxidation catalysts, while large commercial vehicles use mostly selective catalytic reduction.

As emissions requirements become stiffer, Rao predicted that some vehicle manufacturers will in the future use EGR plus DOC and POC for heavy commercial vehicles and SCR for medium-sized vehicles. These technologies will in turn put restrictions on engine oil formulations. Rao said much of the countrys diesel engine oils will need to be formulated with medium levels of sulfated ash, phosphorus and sulfur (collectively referred to as SAPS). These chemicals have been popular in lubricant formulations but have also been deemed harmful to emissions control technologies.

Marketers of diesel engine oils have an opportunity, Rao said, if they can develop lubricants that satisfy varied requirements of different OEMs. A growing number of fleet operators manage multiple makes of vehicles and would like to minimize the number of lubes they handle.

Taking advantage of that and other opportunities could help if the market offers little chance for volume growth. The auto industry, especially the commercial vehicle segment, has been hard hit by the slowdown of Indias economy the past two years. Gulf forecasts that the countrys demand for diesel engine oils will grow at a scant 2 percent to 3 percent annually for the next five years.