Better Oils Require United Front in India


MUMBAI, India – Convincing Indian motorists to use higher quality engine oils requires a collective effort by car and motorcycle manufacturers, oil marketers, installers and traders, according to industry insiders attending a conference here last week.

But such levels of cooperation seldom happen, speakers at the ICIS Indian Base Oils & Lubricants Conference said, leading to uninformed purchasing decisions that reduce profits all along the supply chain.

India has been a relatively low quality lube market in terms of the average product performance level, but many agree the quality has started to rise thanks to the growing numbers of new motorcycles and cars being purchased and to rising emissions and fuel standards that require more advanced engine oil performance.

It is inevitable that the quality of engine oils used here should rise, said N.C. Sekharan, of oil marketer Raj Petro Specialties Pvt., who moderated a panel discussion on the topic Wednesday, but the transition is not happening as quickly as it could.

It is quite obvious to me that it will happen, Sekharan said. We are no different than the rest of the world. But if you look at the ground situation, we have consumers who have no concept of the performance that an engine oil should provide.

Getting consumers to switch to higher performance engine oils benefits oil marketers, distributors, traders and installers, he added, since those products carry bigger profit margins that can be spread along the supply chain. Better oils also benefit motorists, he said, by protecting engines and extending vehicle life to an extent that is worth far more than incremental cost for the lubricant.

Sekharan asked panel members then, to suggest ways that the industry could get consumers to understand and buy into those benefits – a question frequently heard in lube markets around the world. All agreed on the need for clear, coordinated and consistent information to educate motorists.

Harshad Jambulaikar, of lubricant additive supplier Afton Chemical, said its most critical that motorists be exposed to such information as warranties on their cars or motorcycles are expiring. While the warranties are in effect, he explained, consumers have their oil changed at dealerships or OEM-approved workshops, which are more likely to install high performance oils. Once the warranties expire, consumers are free to go to all types of installers, and the choice of oil becomes much less certain.

Post warranty, the consumer is in a frame of mind where he needs to get the right information, Jambulaikar said. Hes in a period where he wants to choose the right lubricant, but hes also influenced by various other factors such as advertising by various oil marketers, advice from installers and cost considerations.

Several speakers agreed that the amount of conflicting messages from the industry is one of the biggest problems. Marketers of low quality oils try to convince people that there is no reason not to use cheaper products. Installers and traders may be motivated by sales incentives from certain oil suppliers instead of the best interests of their customers.

Mathew Abraham, of motorcycle and tractor manufacturer Mahindra & Mahindra Ltd., said its possible to get the different players to cooperate in endorsing a proper oil. He claimed that M&M achieved exactly that when it allied with an unnamed oil marketer to develop an oil specifically for one of its motorcycles and then undertook a significant promotional campaign to convince dealerships to install it.

It was a herculean task to bring this information to our dealerships, Abraham said. We were able to impress upon dealerships what is the right oil, the right quality and the correct drain period.

R.N. Ghosal, of lube marketer Tide Water Oil Co., shed some light, perhaps, on the elusiveness of cooperation, taking a poke at M&M in the process. He recounted a case in which Tide Water worked with the OEM to develop a high-performance genuine engine oil for one of its motorcycles. For a time, M&M actively recommended that customers use only that oil, Ghosal said.

But at some point, the OEM cooperated with another company to develop another oil that was a step down in performance and cost less. Ghosal implied that M&M may have concluded that Tide Waters oil was a difficult sell and that the OEM compromised, endorsing a cheaper, lower quality product to improve its chances of receiving at least some revenue.

Where was the commitment? Ghosal said. Was the objective to use the right oil? Was it to earn more revenue? Later he added, Is there a problem with the oil, or is there a problem with the structure of the deal.

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