GM recently announced that Shell, the worlds largest lubricant supplier, is now licensed to manufacture and market Dexos engine oil. Dexos is required for all GM Buick, Chevrolet, Cadillac and GMC vehicles starting with the 2011 model year. Shells initial Dexos licensed offerings are Pennzoil Platinum and Quaker State Ultimate Durability synthetic engine oils.

Shell synthetic oil is factory fill-approved by GM, and Pennzoil Platinum and Quaker State Ultimate Durability oils are available for consumer use, Debbie Van Schalkwyk, Global Pennzoil brand manager, told Lube Report.

While Shell would not say what size market it anticipates for Dexos, Van Schalkwyk noted that Dexos oils, while required by GM for new 2011 vehicles, are backward compatible. Conventional motor oils are not capable of meeting Dexos, she pointed out. It stands to be seen whether or not owners of pre-2011 cars, especially the larger population who use conventional motor oils, will use Dexos oils.

Pete Sant, Global Shell passenger car motor oil product technology manager, said the companys lubricant blending plants required no changes to accommodate Dexos. The additive packages for Dexos fit nicely into our system and no upgrades or modifications were required to produce Pennzoil Platinum and Quaker State Ultimate Durability motor oils meeting Dexos specifications, Sant told Lube Report. Shell’s international team of scientists worked with additive providers to develop Dexos oils.

Valvoline, a division of Ashland, stated it will not officially license Dexos to minimize the cost impact to customers who would be replacing GF-4 motor oils with Dexos motor oils. The company asserted that its SynPower MST 5W-30 already meets Dexos 2 requirements and can be used in all GM passenger car gasoline and diesel vehicles. In the fall, Valvoline plans to introduce a product that meets the Dexos 1 specification. Valvoline said use of the product it is currently formulating for GM vehicles will not void the vehicle warranties.

Our reasons for not licensing Dexos boil down to our belief that industry specifications are the best and most efficient solution for all parties, including our customers, Ashland spokesman Jim Vitak told Lube Report. Dexos further proliferates the number of products that must be stocked by distributors, installers and retailers, and adds unnecessary further complexity for consumers. Further, the licensing fees proposed by GM are cost prohibitive, and would result in significantly higher costs for the motoring public.

General Motors in March confirmed plans to switch the licensing fee on Dexos from a royalty on every gallon of Dexos sold to a flat annual fee based on an oil companys market share, a GM official confirmed to Lube Report. Originally, licensees were to have paid a $1,000 annual fee for each product, plus a royalty of 36 cents on every gallon of Dexos they sell. Sources suggested GM considers the fee a flat one in that GM looks at market shares today and then calculates what an oil marketers fee will be over the next four years.

While acknowledging Dexos marks a significant shift from how the industry has traditionally set engine oil specifications, GM said it believes it is moving in the right direction.

The benefits of using Dexos include improved fuel economy, better engine protection and reduced emissions, said Eric Johnson, senior project manager for GM Powertrain. Dexos allows GM to ensure the same high quality oil is available worldwide and, in doing so, realizes the economic benefits of consolidating the numerous GM engine oil specifications down to two.

According to GM, the new specifications provide enhanced performance in the areas needed by GM engine technology. For example, the company pointed out that nearly all current GM engines use cam phasing. A key criteria of the oil is sufficient engine oil aeration control so that the hydraulic valve actuation used in these systems functions optimally. In this area, the Dexos specification contains a used oil aeration test. According to GM, no such test exists with GF-5.

GM also cites multi-fueled vehicles as another factor. Approximately 50 percent of General Motors engines will be fuel flexible by 2011. In addition to a number of other areas, Dexos 1 also exceeds GF-5 in corrosion protection, important for multi-fueled vehicles, and piston cleanliness, important for engine operation and durability.

The Center for Quality Assurance in Midland, Mich., serves as program administrator for Dexos licensing. Jo Lynne Parsons, project manager for the Center, said other key drivers for the Dexos program were GMs concerns about engine tests becoming obsolete, and the need to educate consumers and ensure the right oil for the vehicle was easily identifiable. One of the drivers of the program was to generate funds to offset a portion of the engine test development costs and their maintenance, in addition to monitoring the quality of the licensed oils in the market, Parsons explained.

To assist in identification, the Dexos icon/brand needs to be displayed on the front of the label and the license number displayed on the back. The icon makes it easy to identify while the license number shows its authentic, she added.

The Center indicated interest in licensing has been strong. Three additive companies now have formulations approved, and a significant number of marketers of various sizes worldwide are already licensed or in the process of becoming licensed, the Center stated. More than 20 companies have applied to date, and we continue to receive additional inquiries from companies of all sizes, Parsons told Lube Report.

The Dexos license makes sense for companies of various sizes, Parsons said. We have several small and medium-sized companies holding or seeking a license, she noted. However, if some smaller companies dont think it fits this business model to become licensed as a blender, they can purchase Dexos product from a licensed blender and rebrand it.

Parsons emphasized that the Center for Quality Assurance will guide applicants through the process. Upon notification that a company is interested in seeking a license, the CQA will respond with information regarding license procedures and associates fees.

The process to become licensed is relatively simple, according to Parsons. Applicants submit completed documents and a 20-liter retain sample, she explained. Some routine bench tests are run on the retain sample to establish a baseline and confirm compliance. Notification of compliance and execution of the license agreement follows. A unique license number is assigned, and a certificate of license issued.