China Gobbles Cars; Can Lubes Keep Up?


KUALA LUMPUR, Malaysia – In 2006, demand for vehicles in China exceeded 7 million units, making China the worlds second-largest market, and a major automaker predicted that 10 million vehicles will be sold annually by 2010. The countrys automotive lubricant industry is running fast to keep up.

Dai Fuming, manager of the fuels and lubricants department at Dongfeng Motor Co. Ltd. – Chinas third largest automaker by volume, and number one in commercial vehicles – gave an overview of Chinas auto industry, and the lubricants those vehicles call for, at the ICIS Asian Base Oils and Lubricants Conference here on June 20. (Dai spoke in Mandarin with simultaneous translation into English.)

From 2001 to 2005, Dai said, Chinese demand for cars grew at the astounding rate of 24.2 percent per year, to a total of more than 5 million vehicles, far surpassing the 4.4 percent growth of the global market. In 2006, demand surpassed 7 million units, accounting for more than 10 percent of the cars sold worldwide and making China the worlds second-largest consumer of cars, after the United States.

It is expected that output and sales in the Chinese car market will break through 8 million vehicles, said Dai, and will reach around 10 million in terms of output and sales volume by the year 2010.

The passenger car market, noted Dai, will be dominated by joint-venture brands, as Japanese, Korean, European and North American automakers have set up joint ventures in China. The commercial automotive market, however, will be dominated by wholly-owned Chinese brands, but with a higher proportion of joint-venture brands of engines.

China is a vast country, with significant differences among regions, including a large gap in development between eastern and western parts of the country, said Dai. This means there is simultaneously a market for primitive vehicles for agriculture as well as sophisticated autos meeting Euro 3 and Euro 4 emissions standards.

Poor-quality fuel is a common problem, he noted. Gasoline is generally of poor composition with high sulfur content. Diesel is high-sulfur, has high aromatic content, poor oxidation stability and low hexadecane value. There are miscellaneous alternative fuels, including ethanol, methanol, natural gas, LPG and biodiesels.

Poor driving conditions include poor road conditions and a lack of super highways, granular dust and other air pollution, overloading of both passenger and commercial vehicles, and poor driver maintenance practices.

But the combination of rapid growth of the industry and difficult conditions of use will surely bring opportunities and challenges to the car lubrication oil market, Dai said.

Engines and Engine Oils
Environmental protection, energy efficiency and energy diversity by source are driving the development of automobile engines, Dai said. For gasoline engines, the Euro 3 and Euro 4 emissions standards have been adopted, and for diesel engines, the Euro 2 and 3 standards.

Chinas joint ventures with international automakers largely produce Euro 3 compliant engines, with some production meeting Euro 4 for Beijing.

While factory-fill lubricants for gasoline engines are typically compliant with the automakers standards in their home countries, Dai said, in the aftermarket API SE to API SL oils are found. The most common viscosity specification is 10W-30.

On the diesel side, there are four families of engines. European joint-venture engines, such as the Dongfeng Renault DCI11, are used mainly for commercial vehicles, said Dai. U.S. joint-venture engines include the Dongfeng Cummins series, and Zhongfa. The Japanese family includes the Hino 11L, while the fourth family is Chinese private brands, including Yuchai, Weichai and Dongfeng.

Dai compared the progression of emission standards for medium and heavy duty diesel engine vehicles in China to Europe. Euro 3, adopted in Europe in 2000, is planned to take effect in China this year. There is no firm date yet for adoption of Euro 4 for diesel, adopted in Europe in 2005, but Dai thought 2010 is a likely target.

Imported diesel engine oils comply with current European, Japanese and U.S. specifications, said Dai. Domestic diesel engine oils range from API CC to CI-4, with CC, CD and CF-4 in most common use. Multi-grades are now common, with 15W-40 as the most common viscosity grade.

Dongfeng has its own test methods and standards for its diesel engines, calling for a standard oil change interval of 10,000 kilometers. Agricultural vehicles, Dai acknowledged, use low quality oils.

Dai highlighted his concerns with Chinas engine oils, including the large volume of oils below API CC quality in the marketplace. Another concern is that Chinas GB standards have not distinguished between oils for light-duty versus heavy-duty engines. Any attempt to extend drain intervals for commercial vehicles is also a major concern. Because of bad road conditions, domestic intervals are 8,000 to 20,000 km, Dai noted, while abroad 60,000 km to 100,000 km intervals are common.

There are no engine oils available for alternative fueled vehicles, Dai noted, such as those using ethanol or methanol as fuel.

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