Sebastien Vautier, PSA Peugeot Citroens technology manager for automotive lubricants, offered a European automakers perspective on powertrain lubricants in Asia at the ICIS Asian Base Oils & Lubricants Conference in Singapore in June.

PSA sold nearly 3 million vehicles in 2012, Vautier said, with 16 percent of those sales in Asia. The company is first in vehicle sales in France, second in the European Union and eighth worldwide. PSA has great ambitions in Asia, expecting sales to grow nearly fourfold from 2012 to 2020, he said. The company had 44 branded outlets in ASEAN member companies in 2011, and expects that to jump to 176 outlets by 2015.

PSA estimates that Chinas passenger car and light commercial vehicle market will grow from 15.7 million vehicles sold in 2012 to sales of 23.2 million in 2020, while sales in the rest of Asia will climb to 14 million by 2020.

Focusing on drivetrain lubricants, Vautier noted that oil formulation has a challenge, to deal with many contradictions in a complex environment. Automakers must reduce emissions and improve fuel economy while their customers want reduced maintenance and a lower total cost of ownership.

As automakers globalize their engines, they are faced with new fuels and with new customers with different driving styles and maintenance patterns. In addition, Vautier said, meeting emissions and fuel economy targets in the face of increasing crude and fuel prices and economic recession will require breakthrough innovations.

Powertrain lubricants face three big challenges in Asia, Vautier said. First, local fuels frequently contain sulfur, methanol and octane boosters with manganese. Those compounds have a great impact on oil resistance to oxidation, especially on its resistance to coking, so engine formulations must be adapted to resist Asian fuels. And drain intervals must be shorter with high sulfur fuels.

The second challenge is the introduction of the latest engine technologies throughout Asia. Asia cannot be considered only as an emerging market, Vautier warned. The latest engine technologies will require the latest engine oil technologies as well.

The final challenge, said Vautier, is poor oil quality in the aftermarket. This is an issue in Asia which leads to many engine failures. In response, PSA has developed standards for Asia for a semi-synthetic 10W-40, a synthetic 5W-40, a synthetic anti-pollution 5W-30 and a synthetic anti-pollution 0W-30.

Vautiers views on Asian markets were echoed by Mike McCabe, Lubrizols Asia Pacific marketing manager. In a study of 200,000 consumer discussions in online Chinese forums late last year, Lubrizol found nearly 40 percent asking which oil should I use? Debates about synthetic vs. conventional oils accounted for another 17.5 percent of the discussion. McCabe predicted significant changes in demand by oil performance level, viscosity grade and base oil.

For passenger cars, todays highest performing oils (API SN, ILSAC GF-5, ACEA Ax/Bx plus automaker specs, and above) will zoom from less than 10 percent market share in 2010 to 35 percent by 2020. A similar pattern holds for heavy duty diesel engine oils, where API CH-4 and above will rise from 20 percent of the market in 2010 to nearly 50 percent by 2020.

Looking at viscosity grade, McCabe said 10W-xx and lighter oils made up about 17 percent of the passenger car market in 2010 and will account for about two-thirds by 2020; 5Ws and lighter will make up half the 2020 total. On the heavy-duty side, 15Ws and lighter grades will account for nearly two-thirds of the market by 2020.

Changes in engine oil quality will be possible only with major changes in base oil use. For passenger cars, Chinas API Group I demand will plummet from nearly 90 percent market share in 2010 to about 25 percent in 2020. Group II and Group III will each account for around 35 percent by 2020.

For heavy-duty vehicles, Group I oils made up more than 95 percent of the market in 2010 and will account for a bit over 60 percent by 2020, while Group II will gain 35 percent market share.

Chinas most recent five-year plan includes several provisions that will have a significant impact on lubricants. These include stimulating inland growth and urbanization – leading to increased manufacturing, spending power and vehicle ownership. The number of passenger cars in China is forecast to more than double by 2020, to over 220 million vehicles, McCabe said.

Chinas five-year plan also calls for reducing pollution and CO2 emissions. As in the rest of the world, stringent legislation is limiting vehicle emissions, demanding fuel efficiency and better fuel quality. The result is increased demand for high-quality, fuel-efficient engine oils.