Make Extra Revenues with Driveline Fluids
Middle Eastern lubricant companies who want to expand their range locally and into new foreign markets may want to consider the driveline fluid segment, according to a spokesman from a major U.S. additive company.
Lubricant marketers could earn extra profits by offering solutions tailored to the regions unique conditions, said Adam Banks, marketing manager for Afton Chemical, at the ICIS Middle Eastern Base oils and Lubricants Conference in Dubai in October. The driveline segment includes fluids for axles and transmissions and represent a global market of 235,000 metric tons per year.
Driveline fluids constitute 6.5 percent of the total automotive finished lubricant market in volume terms, but the segment is fragmented with several fluids for a variety of applications. It is a prize to be won, he told delegates. Banks went on to say that margins are higher, there is less probability that customers will defect to a different brand or formulation and the segment has historically seen low investment by global companies operating in the region.
Saudi Arabia is a prime example of an opportunity for driveline fluids. The Saudi authorities goal to diversify the national economy away from almost total dependency on oil has powered major growth in the kingdoms freight sector and has meant significant increases in its truck fleet. Harsh driving conditions created by extreme heat, as well as the potential for sand ingress into fuel and parts, have rightly put the focus on heavy-duty diesel engine oil development. But Banks said axles, transmissions and secondary hydraulic systems require servicing and have specific drain intervals, providing a niche opening for lubricant marketers.
The Middle East is well known for its very high, year-round temperatures that regularly exceed 40 degrees Celsius during the summer months. This places significant stresses on lubricant performance. Despite high ambient temperatures, Saudi Arabia remains a predominately mineral-based fluid market in the manual transmission and axle segments. These two fluids account for 75 and 72 percent of their respective markets, in contrast to other commercial markets where synthetic fluids have a stronger presence.
Afton partnered with a major axle manufacturer to create mineral-based fluids that take into account Saudi Arabias market conditions. In both axle and manual transmission fluid tests, an SAE 80W-90 mineral formulation was used. The tests uncovered a correlation between ambient and axle temperatures, which equates to axle temperatures 37 C above ambient.
Temperatures in the dessert can sometimes be 20 or 30 C higher than the fluids were originally designed for, and peak temperatures could be even higher still when a load or gradient are factored in, Banks emphasized. During trials carried out by Afton using several manual transmission fluids, differences in performance between Aftons own MTF and a competitors fluid occurred as temperatures increased. You go up 20 degrees and you start to see sludge and oxidation emerging, Banks said.
Similarly, Aftons proprietary high-temperature gear and pinion test on a mineral oil found both sludge and varnish on gears and bearings using a competitors technology.
Cleanliness is important, since dirt deposits can cause blistering at the edges of seals leading to leakage or contamination. It can also form on the friction disks in limited slip differen-tials, which can lead to noise and vibration. Meanwhile, dirt can block lubricating channels to bearings leading to surface wear or damage. The consequences can be significant.
There have some examples in Brazil where heat and humidity have got to trucks, warping bearing cages in the process, he said.
The opportunity to increase revenue from driveline fluids is not limited to the Middle East. The region is an ideal hub for exports to Africa, already the case for base oils and lubricants. Afton identified Kenya as a profitable market for fluids lubricating continuously variable transmissions, or CVTs. Kenya has a large appetite for imported secondhand cars, accounting for 85 percent of all car sales in the country. Of those, the majority are automatic. Additionally, about 65,000 secondhand cars are imported from Japan per year, and many Japanese models, particularly Nissans, Mitsubishis and Subarus, are fitted with a CVT.
A CVT is a type of automatic transmission that, instead of cogs, consists of two opposing conical pulley wheels connected by a steel belt. A transmission control unit alters the distance between the pulleys movable sheaves, which seamlessly changes the gear ratio. Friction properties are therefore critical, as the lubricant allows metal-on-metal contact to transfer power.
CVT fluid has a regular drain interval, which can be as little as 30,000 kilometers, and hot and dusty conditions necessitate a more frequent drain. An average CVT fill is 7 liters, according to Banks, a potentially lucrative addition to profits.
Afton ran field trials on six vehicles in Las Vegas to mirror conditions in Kenya, extending drain intervals beyond what is considered normal. Aftons candidate oil was then compared with the genuine oil. In two vehicles, the genuine oil failed after 96,000 km but four vehicles using Aftons candidate CVT fluid went on to exceed 160,000 km, with one failure occurring at 167,000 km.
The harsh environmental conditions found in the Middle East and Africa provide an untapped market for companies interested in offering a full portfolio of driveline fluids for commercial and passenger cars. And by localizing brand messages, marketers can roll out offerings across several markets. With the Middle East already established as a lube hub, it is one strategy to beat intensifying competition.