Specs Development Criticized as Broken


SINGAPORE – Amid calls for the automotive and lubricant industries to reform their process for developing automotive engine oil standards, the president of one chemical additive company said the market cannot afford to continue establishing industry and OEM specifications in parallel.

Speaking at the ICIS Asian Base Oils & Lubricants Conference here on May 18, Afton Chemicals Rob Shama said suppliers, automakers and consumers would get better oils and would get them sooner if automakers developed standards that allowed oil marketers to focus on a narrower range of performance parameters.

The process we have today is slow, frustrating and expensive, and leads to commoditization, he said. It really doesnt focus on the consumer and the end user.

Most of the world follows industry automotive engine oil performance standards developed in three places – North America, Europe and Japan. The process is similar in each region: automakers set the performance that oils need to meet for various parameters and then work with oil and chemical companies to develop tests and test limits.

Shama noted, as others have, that the process has become more complicated as the number of parameters rises. Governments now mandate that vehicles meet air emissions limits and fuel economy targets, and these requirements affect engine oils. Automakers add in expectations for the ways that the oils protect engines, and consumers demand performance and long drain intervals.

The problem, Shama said, is that the collaborative nature of the process involves compromises – first among automakers in setting their goals, then between automakers and the lubricants industry in agreeing on requirements, and finally in the development of tests that measure those requirements. The end product, he said, is a standard for minimum performance, and since most oil suppliers launch their products at the same time, the market ends up with many products that are minimally differentiated.

The ultimate specification that we all strive to meet is a compromise of three compromises, he said.

Shamas presentation added to the clamor of dissatisfaction voiced by additive companies in recent months over specification development. Executives from Infineum and Lubrizol gave speeches in recent months that included similar complaints about the current system of developing industry specs. The main difference between their messages and Shamas was that Infineum and Lubrizol called for changes to make the process work better. Shama said that if the industry cannot improve its process it should cease developing industry specs and leave it to individual automakers to write their own.

Were almost there already, he told a reporter after his presentation. The European [original equipment manufacturers] have their own specs, and now GM has dexos. European automakers cooperate to develop engine oil sequences through ACEA, the European Association of Automobile Manufacturers, but many companies then write their own standards, using ACEA sequences as a base and adding more requirements. Shama described the development of both industry and OEM specs as a belts and braces approach, by which he meant awkwardly and counterproductively redundant.

Shama said he wants the engine oil market to operate on the same basis as many others – with marketers focusing on the demands of consumers or end users.

If you want to know if a product is good, talk to the end user, he said. And this process doesnt do much of that. The theory of market segmentation, he said, postulates that consumers of a certain type of product can be divided into groups that share different priorities in the performance they expect from that product. As an example, Shama cited the North American market for toothpaste, which has a large number of products focusing on a wide variety of performance claims – from cavity prevention to teeth whitening, breath freshening, tartar control, gum protection and aid for tooth sensitivity.

Taking a similar approach, Shama said, engine oil marketers could offer products targeted towards specific types of vehicles: trucks and other machines used in mining; tractors and other farm equipment; city buses; heavy-duty trucks used for long hauls; and commercial vehicles such as vans used for pick-up and delivery.

All of these groups might demand things that todays specification development process is trying to address, including fuel economy, emissions control, engine protection, low cost of ownership, and equipment performance. But users in different groups would probably have different priorities, Shama said.

While many people would mention things on this list, they dont all talk about all of them and they dont all have the same priorities, he said.

Shama acknowledged afterward that many passenger car motorists have limited understanding of engine oil performance, and he added that the approach he advocated, which he called bespoke solutions from insight-based segmentation, would make more sense for professional end users such as fleet managers, farmers and construction equipment operators. Researching their needs and developing products to meet them would require more work by oil and additive companies, he said, but those companies would be rewarded because those end users would pay more for such products.

Developing markets, such as those in Asia, are particularly ill-served by the current system of developing engine oil standards, Shama said.

Why would it make sense that the ideal lubricant that we develop for a mature market would be what is needed in developing markets of this region? he said. If there is a region that would really benefit from the kind of thinking Im talking about, this is it.

While maintaining that the current system does a poor job of meeting the lubrication needs of the most modern vehicles, for which specifications are written, Shama contended that it is even worse for older vehicles, which constitute large parts of vehicle populations in many markets.

This system focuses almost exclusively on new equipment, he said. I think the old equipment needs better than backward compatible. Industry groups usually ensure that new specifications are backward compatible, meaning safe to substitute for oils meeting earlier specifications.

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