Auto Service World
Feature   August 1, 2005   by John G. Smith

The Big Oil Change

Formulas continue to emerge for specific applications and vehicles

Oil changes have long been counted among the simplest procedures that can be performed on a vehicle. Drain the pan. Replace the plug. Fill the crankcase.

If only the business side of the equation was that simple.

Today’s garages are being challenged by a steady rise in application-specific formulas and oils designed for individual vehicle nameplates — and that’s leading to some significant inventory issues.

“Your SKUs start to proliferate,” says Anthony Stadelman, marketing manager for Wakefield (Castrol). “At the installer [level], how many tanks do you have, and what do you put in each tank? It might be you don’t have a tank for 10-30 anymore.”

As an example, Alan Crossley, vice-president and general manager of NOCO Lubricants, has seen his number of SKUs increasing almost 50 per cent in just four years. His generic 10W30 sales are dropping in the process.

“The total order stays the same, but we end up with more SKUs on one pallet”, he says. “Even as a distributor, it’s taxing on our system.”

That’s no small change. Many oil suppliers suggest that the growing list of vehicle-specific oils may push more independent shops to join banner programs if they want to ensure supplies without needing to build an extra warehouse in the back lot.

“You may not have to have it in your shop … but somebody has to have the inventory somewhere,” says Pennzoil Quaker State’s Mark Reed.

The scope of the issue may still be a surprise to some independent garages. According to JD Power and Associates, dealerships account for 77 per cent of lube oil and filter work on vehicles that are two or three years old. Independent shops don’t dominate the work until the vehicles are eight to 12 years old. At that point, they account for 26 per cent of the service, compared to the 24 per cent still performed at dealerships.

But the changes are inevitable.

“Those folks are at a crossroads,” says Richard Perrier, category manager for Petro-Canada’s lubricant business. “Do they target themselves on just focusing on older vehicles?”

Geographic differences

In many cases, the fundamental differences in the growing number of automotive formulas can be linked to geography. In Europe, oil standards tend to focus more on vehicle performance, while North American standards focus on conserving fuel economy. Meanwhile, oil change intervals across the Atlantic are as high as 30,000 km with sophisticated monitoring systems (although 15,000 km is more typical), thanks in part to a European oil’s shear point of 3.5, compared to North America’s 2.9.

Perhaps the differences in oils shouldn’t be that surprising, considering that the science of oils is often a matter of give and take. A formula blended to meet BMW’s model-specific needs and Europe’s ACEA (Association des Constructeurs Europeans) standards, for example, will not meet North America’s API or ILSAC fuel economy spec’s, Stadelman says.

A glaring example of the differences can be found in the form of sludge problems that emerged in Volkswagen’s TDI engines, when their crankcases were filled with North America’s API oils. Almost one per cent of these 1.8-litre Passat powerplants had to be repaired or replaced. (The sludge isn’t a problem when a required synthetic 5W40 is used.)

While engine makers can address such problems by introducing specific standards of their own, that creates a marketing challenge for those who provide the oil. It simply becomes more difficult to differentiate the products.

“It becomes really difficult to stand out in more than a couple of categories,” Stadelman says, noting how buyers will simply seek their manufacturer’s stamp of approval. “All of the other potential benefits become irrelevant.”

Marketing matters

But there are some marketing-related approaches to application-specific oils that have been very successful.

“When you market to a specific vehicle type and the way you drive it, it rings very clear with the consumer. It’s understood,” says Reed, noting how his company was the first to unveil oil for 4×4 vehicles. “And obviously, there’s a good profit factor for it in the shop themselves.”

“The high-mileage category has become very popular at retail,” Stadelman adds as another example, referring to a category pioneered by Valvoline. “It’s a very simple category. People get it right off the bat.”

Indeed, the concept is easier to explain than the benefits of a synthetic blend. If the odometer is turning faster than it does for most people, the vehicle can use a high-mileage oil.

Shops, however, seem to have been slower to promote the high-mileage fluids. The category has been growing in double digits at the retail level, while installers are only seeing half that growth, Stadelman says.

More application-specific oils are on the horizon. Pennzoil, for example, will soon offer a 0W20 oil designed for hybrid vehicles.

“With the hybrid vehicles, the engine is under so much stress because when you stop the vehicle, everything shuts down,” Reed explains, referring to the formula designed for a quick flow through the engine at each start. “These things are on and off all day.”

Among the changes to come, however, Perrier doesn’t expect North American manufacturers to push for extended drain intervals that match those in Europe.

“If you’re an OEM, part of the reason they haven’t said, ‘I want to go to 25,000 km’ is they can see the vehicle back if there are any issues,” he says, “and people are used to 5,000 km or that normal cycle in terms of bringing the car in.”

There are also other limits to extending drains, Crossley adds. “The big issue is still the filter. There’s still as much sediment being trapped by the oils.”

Ultimately, it will be up to the shops to inform consumers about the benefits of oils to meet specific needs of any kind.

“In talking to most of the guys in the shops, the general consumer still pulls in and says, ‘I need an oil change,'” Crossley says, referring to how few buyers are asking for the products upfront, even if they grasp what they can do.

His own introduction to vehicle-specific oils came when Ford Explorers first required 5W20.

Adds Crossley: “I learned about it when my $29 oil change became $69.”

Special Oils for Special Cars

Despite the ubiquity of the API “doughnut” on retail motor oils and the use of SAE viscosity standards, some import (and a few very high performance domestic) vehicles require oils that aren’t just special, they’re specific. An example is Audi’s new high-performance RS 6. it requires a special synthetic oil conforming to Volkswagen Oil Standard 505 01. The viscosity is 5W-40. According to Volkswagen, failure to use the correct oil “can cause engine failure on the highway that can cause a crash and serious personal injury”. The manufacturer also states that: “If you use engine oil that does not expressly conform to Volkswagen Oil Standard 505 01 (5W-40 Synthetic Motor Oil), very serious and very expensive damage to your vehicle’s engine will occur. Your Limited New Vehicle Warranty will not cover engine damage caused by using the wrong engine oil.”

VW doesn’t allow other spec oils even for top-up, and adds a spare bottle in the trunk for this purpose. Approved oils for this application are Castrol “505 01”, ELF “Excellium DID”, Motul “Motul Specific 505 01”,Quaker State “Diesel Plus SB”, Total “Quartz 505.01” and Volkswagen Part No: G 052 167 A2, which is only available at authorized Audi and Volkswagen Dealers.

Will this trend move down to lesser machinery? Probably, as evidenced by the special multigrades recently specified by Honda and Ford. The key is to remember that the viscosity isn’t enough when selecting oils for specific applications, and the consequences of an engine failure may be yours if you use the wrong product, even if the damage isn’t directly oil-related.

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