For 2011, Kline estimated the U.S. commercial automotive market at 528.6 million gallons, with almost $5.3 billion in revenue. That compared to 585 million gallons and $4.4 billion in revenue in 2008.

Kline estimated that tonnage carried by private fleet operators in the United States will increase only by 3 percent through 2016. The company noted that on-highway activity saw a surge in the latter half of 2010 that continued well into 2011, and that the lackluster performance of the construction industry between 2008 and 2010 has begun to show signs of a rebound. Other factors in the modest demand growth projection to 2016 include increased service implementation of longer drain intervals due to higher penetration of synthetics, growth in oil analysis practices and an overall increase in commercial vehicles mechanical efficiency

For the entire U.S. commercial heavy-duty motor oil [HDMO] segment, Kline estimates that full synthetics account for about 3 percent of total HDMO demand and semi-synthetics about 5 percent, said George Morvey, U.S.-based project manager with Klines Petroleum and Energy Practice. Synthetic engine oil penetration in HDMO is low given that few if any heavy duty truck OEMs specify synthetics for factory and service fill applications.

He noted this could change when the next heavy-duty engine oil category, PC-11, goes into effect in 2016, and OEMs must meet more stringent fuel economy regulations. This may prompt OEMs to specify lower viscosity engine oils, a potential technical driver to synthetic usage, he pointed out.

This may prompt OEMs to specify lower viscosity engine oils, a potential technical driver to synthetic usage, he pointed out.

In terms of commercial automotive visgrades, Kline has observed a slow shift in conventional HDMO from 15W-40 to 10W-30 as a means of improving fuel economy in large over the road trucks. In 2011, Kline estimated SAE 15W-40 still accounted for 82.6 percent of HDMO demand, and 10W-30 for only 4.9 percent.

Fuel savings from using a lower visgrade like 10W-30 are more likely to resonate with fleet maintenance managers of large trucking companies than it would with an owner-operator with a long track record and loyalty to 15W-40, Morvey said.

According to Klines estimates for 2011, Shell remained the leading U.S. supplier of commercial automotive lubricants at 15.9 percent of total consumption. It was followed by Chevron at 12.5 percent, ExxonMobil at 10.2 percent, Conoco Phillips with 8.9 percent, BP at 3 percent, Citgo with 2.3 percent and Valvoline at 0.6 percent. The remaining 46.6 percent included a variety of regional independent suppliers, OEM brands and house brands of lubricant distributors.

According to Kline, while rerefined engine oils are slowly making their way into the commercial automotive segment, a majority of respondents that participated in surveys for the research cited concerns about OEM approvals of such grades and the possible non-availability on the highways as major deterrents.

In particular, Kline said the U.S. commercial trucking industry generally appears not yet prepared to accept rerefined oils. A majority of equipment/maintenance managers interviewed conceded that reliability and logistics issues are prime considerations and impediments.

Morvey pointed out that the push back observed regarding rerefined engine oil in the U.S. commercial automotive market may just be a barrier or misperception about the product or fear of the unknown.

Putting the commercial segment into context is important, he emphasized. Owner-operators make up a significant part of the commercial sector, and are very brand loyal and visgrade loyal given that they cannot afford to experience any unforeseen failure of the equipment, which could severely impact their livelihood, he said.

Where we see the real opportunity is in federal, state and local government fleets,” he added. “Also, the lease-rental segment. Imagine the goodwill a company like Enterprise or Avis could garner if they convert their fleets over to rerefined engine oils and tout the environmental and economic savings in their marketing messages.

Tushar Raval, Klines Energy Practice project lead, noted that farmers and farm cooperatives could be another opportunity for lubricants made from rerefined base oils. An immediate connect can be made by the way of marketing rerefined oils as sustainable products and consequently more easily find favor from the farmer community, Raval said. Another – and certainly critical – way of successfully propagating the acceptance of these grades is by way of approvals and recommendations from OEMs, such as John Deere.

The study also includes estimates for Canada and Mexico.

Kline estimated Canadas commercial automotive lubricants demand for 2011 at 64.5 million gallons with nearly $563 million in revenue, and projected it will increase 10.5 percent to 71.3 million gallons in 2016.

Kline estimated Mexicos commercial automotive lubricants demand in 2011 at 65 million gallons and $502.5 million revenue, with demand projected to grow 16.9 percent to 76 million gallons in 2016.