Engine oils and hydraulic and transmission fluids will experience the fastest gains as synthetics finally begin to penetrate the conservative medium and heavy duty truck market, Cleveland-based Freedonia suggests, and as increasing new vehicle lubricant performance requirements and growing consumer acceptance further expand synthetics share of the light vehicle market.

Marketing is a key to the growing embrace of synthetics by consumers, said Freedonia analyst Ned Zimmerman. Stepped-up marketing by major brands such as Pennzoil and Valvoline, in addition to Mobils, will both increase consumer awareness of synthetics as an option, and expand the general understanding of synthetics advantage over petroleum-base oils, Zimmerman told Lube Report. Warranty programs by Pennzoil and Valvoline will also help, as it will afford less technically sophisticated consumers peace of mind that they are making a safe choice in using synthetics to protect their car engines.

The increased use of synthetics as factory fill by GM and likely other manufacturers, as Corporate Average Fuel Economy (CAFE) requirements continue to rise, should help drive consumer uptake as consumer awareness of synthetics grows, he continued. There will be a segment of the population who will not change away from synthetics, viewing their continued use as the better safe than sorry option, Zimmerman added.

While synthetics awareness is already strong in the do-it-yourself market, he said, near- term economic pressures will likely drive many to evaluate and choose synthetics in an effort to reduce maintenance costs.

The do-it-for-me market will react more to national marketing efforts, Zimmerman suggested. While the TV and print campaigns are not likely to lead many [customers] in the DIFM segment to go in demanding synthetics, the greater awareness due to the national marketing campaigns is expected to make consumers in the DIFM more susceptible to up-selling by lube shops seeking to boost revenues, he continued. In particular, I expect to see more evidence of this occurring at places such as Jiffy Lube, which features Pennzoil products, or Valvoline Express, due to their close relationships with the parent oil companies.

On the fleet side, Freedonia believes increasingly stringent engine specifications, along with a move by many diesel engine manufacturers to specify low-viscosity engine oils for their 2010 emissions-compliant engines, will finally lead many fleet operators to evaluate and use synthetic engine oils and hydraulic and transmission fluids.

Synthetics will benefit from their better performance under load in low-viscosity formulations, as well as from the reduced maintenance and downtime costs that result from synthetics extended drain intervals, the business research firm concluded. The latter will be increasingly important to fleet operators looking to cut costs.

From a product standpoint, the firm is less optimistic about synthetic heat transfer and metalworking fluids in the United States. The study predicts heat transfer fluid demand will decrease 2.6 percent per year to $1.2 billion in 2013, and synthetic metalworking fluids demand will decline 3.2 percent annually to $170 million in 2013.

In addition to declining vehicle antifreeze demand, the greater use of fill-for-life coolant systems in industrial equipment and the increased recycling of deicing fluids at airports will contribute to falling heat transfer fluid demand, Freedonia predicted. Synthetic metalworking fluid demand will suffer from increasing substitution of bio-based fluids for synthetics.

Several factors have impacted vehicle antifreeze demand, according to Zimmerman. One has been better cooling system design, which has resulted in a lengthening in recommended flush intervals, he pointed out. Increased vehicle quality has also meant that fewer cars are springing radiator or other cooling system leaks, which has meant less topping off. Additionally, well slowly see more sealed-for-life cooling systems in cars from auto manufacturers, and rising CAFE requirements will likely require a shift toward smaller cars that will need less coolant per vehicle.

In metalworking fluids, he expects bio-based fluids will make inroads as a replacement for synthetics in metal cutting applications, as this is where you see a lot of the volatilization of the fluids, which is a major point of emphasis from a worker health standpoint right now. He acknowledged it will remain difficult for bio-based fluids to compete in real temperature extremes, so we wont see a complete collapse of the synthetic market in metalworking fluids.

Among synthetic types, Group III base oils and polyalphaolefins will grow fastest, Freedonia projected, because of their heavy use in engine oils, hydraulic and transmission fluids. Esters also should achieve positive value growth through 2013, the firms research suggests.

The 258-page Synthetic Lubricants & Functional Fluids study is $4,700 from The Freedonia Group. See www.freedoniagroup.com for details.