Chevron Stakes Out 2-Tier Strategy for CJ-4


At least one heavy-duty engine oil marketer plans to bite the bullet when the next heavy-duty engine oil upgrade, API CJ-4, comes to marketin thefall. Chevron Products Co. announced yesterday that it will employ a two-tier strategy, offering oils for both the new and the current specification.

Chevron said it decided to carry two lines of products in order to give on-highway truck operators the option of not using new oils, which are expected to cost significantly more.

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There is a lot of anxiety over new engines, fuels, exhaust treatments and lubricants, said Nicole Fujishige, Chevrons commercial marketing manager for North America. It is important for our customers to know they will have one less thing to worry about as 2007 approaches.

ASTMs Heavy Duty Engine Oil Classification Panel developed CJ-4 for model year 2007 on-road trucks, which will have to adhere to tighter emissions limits. At least some engine manufacturers are expected to meet those limits by circulating exhaust back through engines, causing greater buildups of soot in engine oil. Many observers agree it will be significantly more expensive to formulate oils that cope with that soot while meeting other performance expectations.

During previous upgrades, many major oil marketers have fully converted to new specifications as soon as they come to market. In this case, however, manyoperators are expected to want to keep using CI-4 Plus oils where possible.

Historically Chevron has fully embraced each new heavy-duty engine oil specification, Fujishige said. In this situation, there is clearly a need to retain the CI-4 Plus oil, while introducing the CJ-4 product. Although backwards compatible, CJ-4 will likely be more expensive than CI-4 Plus and is not required for the off-road market or pre-2007 engines. Based on fleet composition, the majority of Chevrons customers will have a greater need for CI-4 Plus, so well keep that product on the market until conditions change.

Chevron will continue offering Delo 400 and Ursa multigrade 15W-40 oils alongside its new CJ-4 products, Delo 400 LE (for low emissions) and Ursa LA (for low ash). The company said it expects both new products to be available Oct. 26, when the American Petroleum Institute is scheduled to begin commercial licensing for the new specification.

Chevron appears to be the first major oil marketer to announce its strategy for CJ-4, although officials at several competitors could not be reached for comment yesterday afternoon. An official with BP Castrol said it has developed a plan but was not ready to disclose it.

The official, Technology Manager Steve Goodier of Castrol Heavy Duty, did observe that marketers of heavy-duty oils face growing pressure to offer multiple products – and not just because of the new API category. Several engine manufacturers have adopted their own oil specifications, and some are incompatible with predecessor categories.

I think its inevitable that there is a new requirement for a two-tier strategy, Goodier said. But it creates a complex situation – not just for oil companies, but for distributors and sellers, too. When you go to two products instead of one, now you have to make two types of bottles and two types of labels, and you need twice as many storage tanks.

Goodier maintained that such problems are manageable, noting that companies have already confronted them in Europe, where OEM specs proliferate.

Chevron, however, suggested that some marketers may opt to avoid the complication of multi-tier strategies.We look at this as an opportunity to increase market share and improve profitability, Chevron spokeswoman Sandy Sullivan said.

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