Service Center Chain Offers House Oils

BEJING - A Hong Kong company trying to develop a new model of automotive service centers for China has launched its own brands of engine oils.

Oriental Technology Limited saysits OTL Service stores will fix chronic flaws that have made 4S auto dealerships maligned even as they remained the predominant channel for automotive services with the countrys burgeoning population of car owners.

Photo courtesy of OTL Group

OTL Service centers, a new chain of auto service providers in China, has launched its own brands of engine oils.

OTL displayed the new oils, which are sold under the SynXtra and SynNeo brands, at the Inter Lubric China exhibition here Sept. 21-23. Representatives said they will be offered at OTL Service shops, a chain that the company launched in 2014. Both are full-synthetics imported from Saudi Arabia where they are manufactured by The Arabian Petroleum Supply Co., regional blender and marketer of lubricants for ExxonMobil and several original equipment manufacturers.

Named for the four types of products and services that they offer - auto sales, service, spare parts and surveys (or a means for customers to provide feedback) - 4S centers are dealerships for the various brands of cars sold in China. Car owners usually rely on them for maintenance of new cars, including oil changes. But they also draw a number of common complaints.

For example, 4S stores are often criticized for their opaque charges, and they lose many customers to street vendors after the maintenance plan period is up. Also, 4S stores are often located in suburb areas, which is inconvenient for customers in town, OTL General Manager for South China Danny Sham said during an interview.

Such flaws fostered the idea of OTL Service, he continued. For example, OTL Service stores are often located in town near dense residential areas where 4S stores are not present.

Street vendors are cheap, but with quality risks, Sham said. At OTL Service, customers are assured of enjoying our high quality service at the best price.

Unlike 4S stores, which only sell parts and oils authorized by automakers, OTL Service stores are entitled to sell OTL-branded products.

So far, weve got fairly positive feedback from our customers about OTL products, including auto parts and oils, Sham said.

OTL, which also operates dozens of 4S dealerships, started to test OTL Service in Shanghai in 2014. It now has over 10 OTL Service stores in Shanghai and is in talks with dozens of potential franchisers in other cities, Sham said. The company aims to open 360 OTL Service stores by 2020 in China nationwide.

According to the company, an OTL Service store in Shanghai can attract an average of 600 customers a month, generating 500,000 (U.S. $75,000) in sales.

We have confidence in Chinas after care market, and we believe OTL oils will be favored by more customers as we continue to expand OTL Service, Sham said.