NICE, France – Truck manufacturer Volvo has an encouraging forecast for lubricant marketers concerned about the proliferation of heavy-duty engine oil specifications: Those standards could converge by the end of this decade.
That prediction was part of a Oct. 26 presentation given here by Bengt Otterholm, lubricants coordinator for Volvo Technology Corp., at the annual meeting of the Independent Union of the European Lubricant Industry (UEIL). He concluded that oil specifications in North America and Europe are already moving closer together. Within four years, he suggested, the industry could have a global standard supplemented by a handful of less dissimilar engine builder requirements.
The market has become fragmented by a proliferation of specifications, Otterholm said. In the future, though, I think there will be convergence.
Marketers of heavy-duty engine oils have complained for several years that fragmentation is increasing the cost of doing business in the segment. Each of the biggest regional markets has its own industry specification – owned by the American Petroleum Institute in North America, the Association of European Automobile Manufacturers (ACEA) in Western Europe, and the Japanese Automobile Standards Organization in Asia-Pacific.
In addition, unlike the passenger car motor oil market in North America, most major manufacturers of truck engines adopt their own specifications. The result is that oil marketers must incur approval costs for each make of truck for which they want to supply oil.
According to Otterholm, air pollution regulations have become the main factor driving heavy-duty engine oil standards. U.S. laws spurred the adoption of API CJ-4, which began licensing last month. European oils will have to comply with Euro 5 emissions mandates scheduled to take effect in 2008.
But the situation is complicated by the fact that engine makers have chosen different exhaust aftertreatment systems – diesel particulate filters, selective catalytic reduction, diesel oxidation catalysts, nitrogen oxide adsorber catalysts – or combinations of them to meet those regulations. Each of those technologies exert their own demands on engine oils, as do other design peculiarities.
But Otterholm found hope in early signs that Euro 5 emissions requirements will move ACEAs specification closer to CJ-4. He suggested that the organizations may adopt identical requirements in 2010.
He also predicted that the proliferation of engine designs will be reversed by two factors. One is the trend of mergers and tie-ups between manufacturers such as DaimlerChrysler and Detroit Diesel; Scania and Cummins; and Volvo, Renault and Mack. The other is the fact that engine manufacturers are global companies that try to streamline products geographically.
OEMs (original equipment manufacturers) have global engines, he said. They need global lubricants.
Otterholm cautioned that lubricant blenders should not expect a complete convergence of heavy-duty engine oil specifications. Even if the market adopts a global standard, engine manufacturers will continue to use their own specifications because the industry organizations use consensus decision-making processes that entail compromises. Consequently, their requirements are not strong enough to meet all manufacturer needs.
Still, he envisions a market with a global industry standard complimented by OEM specifications that are more similar than those existing today.
He allowed that his forecast has an important caveate – the fact Japanese engine manufacturers have not yet shown signs of joining the growing assimilation that is bringing North America and Europe closer together.
Im not real sure where Japan is heading, he said.