Diesel Oils Trend Toward OEM Specs


Proprietary specifications – on top of industrywide standards – are becoming a way of life for heavy-duty engine oil marketers. While vowing support for the American Petroleum Institutes engine oil classification system, heavy-duty engine builders continue to pile their own tough standards on top of the accepted industry categories for heavy-duty engine oils.

Latest sign of this trend was Caterpillar Inc.s announcement last month that it would issue two new proprietary heavy-duty diesel engine oil specifications, ECF-2 and ECF-3. Also, for the first time, it will have a registration program for products meeting the new specifications. (See Lube Reports Dec. 21 issue.)

CATs Dec. 7 announcement startled the industry, and dismayed some who have been hard at work to deliver the next diesel engine oil upgrade, API CJ-4. Caterpillar is to release draft specifications for both ECF-2 and an interim version of ECF-3 on Jan. 16.

Two other U.S. diesel engine manufacturers have long-established proprietary engine oil specification and registration systems. (So far, Detroits Big Three passenger car automobile manufacturers have been loyal to APIs engine oils, but do have proprietary specifications and registration systems for automatic transmission fluids, including Fords Mercon, General Motors Dexron, and Chryslers new ATF+4 fluid.)

Engine builder Cummins Inc. has maintained a proprietary engine oil specification and registration system for seven years. The current specification for the Cummins product, which generally parallels API CI-4 PLUS, is CES 20078.

Cummins Senior Engineer Warren Totten points out, The new Cummins specification will be CES 20081 and will have the same general performance levels as CJ-4 but may be tailored to meet our specific engine needs. It will be published in April 2006, with oils available in the marketplace by July 1, 2006.

Registering an oil with Cummins costs $950 per year; currently over 80 oil brands are registered as meeting the CES 20078 specifications.

Totten adds, Additive and oil companies furnish us with their data which is reviewed, and if the data meets Cummins specifications, the product is placed on a list of registered oils, and the oil marketer is issued a letter indicating registration of the product. The oil marketer can cite that registration on labels and marketing documents. We do have an aftermarket monitoring program administered by a third party.

Volvo Powertrain North America has published proprietary engine oil specifications and maintained a review and approval program for 35 years, originally begun by Mack Truck Inc. which was purchased by Volvo Truck in 2000. Its current category is called EO-N.

Greg Shank, Volvo Powertrains manager of engine product development and its coordinator of lubricants, fuels, coolant and filtration technology,says, Our Volvo Powertrain company specification for our new oil will be called EO-O Premium Plus. These specifications will be issued in May/June 2006, with oils required in September. The specification will be based on CJ-4 with some additional requirements, such as the Volvo D12D Piston Deposit Test.

Shank, who also chairs the Engine Manufacturers Associations Lubricants Committee, emphasizes that his company will not do anything to negatively impact the timing of API licensed CJ-4 oils in the marketplace.

He explained that under Volvo Powertrains registration system, oil marketers will provide it with test data for EO-O Premium Plus oils, which will be reviewed; products with accepted formulations and data will be placed on an approved product list and marketers can cite the approval on marketing documents and container labels.

Volvos product-monitoring system will also continue for registered EO-O Premium Plus oils, using a third party supplier to select a sample of each approved oil from the retail aftermarket, analyze it and compare it against the specifications and formulations on file.

Many oil marketers worry that all this splintering of specifications may make it difficult to recoup the expense of developing and marketing heavy-duty engine oils, which in the United States amounts to only about one-third of the volume of gasoline engine oils sold. However, diesel oil sales for now seem to be on an upswing.

According to the NPRAs 2004 report on Lubricating Oil Sales, diesel engine oil sales grew a healthy 4.5 percent versus 2003, with higher-value multigrade diesel oils taking an even larger share of the market than ever before. The NPRA reports comparative data showed sales of automotive diesel engine oils totaled 385.3 million gallons in 2004, versus 368.7 million gallons the year before.

Some of this growth can be attributed to the double-digit gains in heavy-duty truck sales over the past two years. Transport Topics, the publication of the American Trucking Association, reported Class 8 truck sales grew about 29 percent in the first nine months of 2005, versus the same period in 2004, as operators beefed up their fleets to meet freight demand. Operators who had hesitated to buy powertrains compliant with EPAs 2002 emission standards also began finally to replace older equipment.

Whether this growth will hold steady is the subject of a new study from Palo Alto, Calif., based consultants Frost and Sullivan, North American Class 6-8 Truck OE Powertain Systems Markets.

North Americas original equipment market for Class 6-8 truck powertrain systems – consisting of engines, turbochargers, cooling systems, aftertreatment systems, clutches and transmissions – generated revenues worth $8.2 billion in 2004, the study said, and is expected to grow at 6 percent compound annual growth rate to $12.3 billion by 2011.

For now, Caterpillar is the market leader in terms of revenues in the Class 6-8 truck engines market, followed by Cummins and Detroit Diesel, Frost and Sullivans Sandeep Kar told Lube Report.

On the surface, it seems like the heavy-duty truck OE powertrain systems market has finally bounced back and is poised at the launchpad for steady and stable growth, added Kar, an automotive and transportation industry analyst in Frosts Toronto office. However, a closer look reveals that OEMs and component suppliers are not really resonating the upbeat growth projections, and theres lots to worry about in this market over the next five to six years, he added.

The market is expected to grow in the long-term, weathering downturns brought about by significant price increases of new trucks and cyclical volume swings, the Frost and Sullivan report forecasts. The rising prices of the new range of powertrain systems developed for the post-2007 model year trucks may help to blunt the effect of the downturns in unit shipments, but fluctuations are expected in new truck build rates through 2011, Kar explained. As the market passes through volume swings in this period, the competition among the powertrain system suppliers will increase and market shares will change continuously.

Those companies working closely with truck makers and focusing on end-user research to develop innovative powertrain systems that present attractive price points to end-users and also reduce the trucks lifecycle costs are expected to gain market share in this period, the study advises.

For more information about the Frost and Sullivan report, North American Class 6-8 Truck OE Powertain Systems Markets, visit www.tranportation.frost.com, or e-mail tolu.babalola@frost.com.