The lubricant contribution
01 September 2012
01 September 2012
Predicting the future of viscosity grade trends
Steve Haffner, Infineum North American Crankcase Market Manager, reveals how reliable data and market knowledge are help us to build a good picture of future viscosity grade trends, crucial for accurate supply and demand forecasting.
Of all the questions Infineum receives, those concerning future SAE viscosity grade trends are some of the most common. These questions cover the latest OEM recommendations, industry specifications, the impact of evolving lubricant specifications and how to plan for the future. On the surface they may seem very simple; but predicting the future is in reality very complex.
It is essential to get these predictions right because they are critical for planning the demand and capacity for base stock and viscosity modifier supply.
While this feature focuses on the key factors used to predict future viscosity grade trends in North America (NA), similar analysis could be done for other regions – bearing in mind that emerging markets lag developed markets by many years and past information is not always readily available.
Although new specifications are always the major discussion item in industry, they have little impact on viscosity grade trends. For example, ILSAC GF-6 will introduce a new viscosity grade likely to be called SAE 0W-16.
Honda has said it will introduce this grade in NA as early as 2015 and may allow its use in some older vehicles. No other OEM to date has come forward to join Honda, and most OEMs have said they believe SAE 0W-20 and 5W-20 will continue to meet their needs. To determine the impact of this scenario, we look at Honda’s market position for new sales in NA compared with the overall NA car parc.
History tells us that, except for dealers, only new vehicles will use this grade and, at least at the early stages of a new viscosity grade, not all new Hondas will be serviced with it. The net result is that, for the first years of this grade, volumes will be small and mostly at Honda dealers. It may be 2020 before we see significant volumes of the new grade and even then it is likely to be a low percentage of the oil sold.
Factors such as OEM supplied oil changes, consumer education and other OEMs adopting the grade could further influence volume estimates. In general, Infineum looks at all major OEM viscosity grade recommendations to estimate future demand with changes in the car parc population.
Factors to consider Vehicle population age and OEM market position are the key factors that impact viscosity grade trends.
In NA the car parc is somewhere between 240-250 million vehicles, with the latest new diesel and gasoline engine production making up only a small fraction of this number.
Consequently, it takes many years for new viscosity grades to make up a significant portion of the overall market. This means past and current data can be used to make reasonably accurate future predictions. But, as they say in financial circles, ‘the past does not guarantee the future and most predictions are wrong, but some are more right than others’!
Another factor that impacts viscosity trends is base stock supply. It appears that there will be ample supply of Group III, to allow for SAE 0W-XX and more premium products. However, with some applications calling for either very high viscosity index (VI) Group III or PAO, it is not clear if there will be enough of these products to meet demand.
Consumer habits and OEM support for car maintenance are also factors to consider. Will consumers go to dealers, third party service providers, or carry out oil changes themselves? Will more OEMs include oil change service as part of the overall new purchase value proposition and how will cost impact the decision maker?
Despite the fact that good quality oil protects the engine and helps it to last for many years, consumers may still opt for less expensive conventional oils as opposed to more costly SAE 0W-XX and premium performance products.
North American market Currently, in the NA PCMO market, SAE 5W-30 is the most common viscosity grade. It represents over 50% of oil sold, despite the fact that SAE 5W-20 and 0W-20 are the most widely recommended grades for new cars.
Experience tells us that it takes at least 10 years for a viscosity grade to rise to the top market position and then fall.
Those of us who have been around for a while will remember that SAE 5W-30 was first introduced as a more standard recommendation in the late 1980s. But it was not until 2006-07 that it became the most widely sold oil.
SAE 10W-30 represented over a 50% share in 2001 and still has about 15% of the market, even though few OEMs have made this grade their primary recommendation since the 1990s.
Viscosity grade trend forecasts in the North American PCMO markets
For heavy-duty diesel (HDD), the future is less predictable. SAE 15W-40 has been the workhorse SAE viscosity grade for many years; with SAE 10W-30 having only a very small market position.SAE 5W-40 began to grow about five years ago but still only represents around 2% of the market.
At one time monogrades held a large share; but now represent well below 10% and are still declining. The future is made less predictable by the rising cost of fuel and the growing importance of HDD fuel economy. SAE 10W-30 is expected to see rapid growth but SAE 5W-30 and even new fuel economy products below SAE 5W-30 will emerge. Fuel price is likely to have a large impact on the acceptance of lower viscosity and more fuel efficient lubricants.
Viscosity grade trend forecasts in the North American HDD markets
In both PCMO and HDD it is essential that in the quest for fuel economy the introduction of lower viscosity grades does not compromise engine durability or emissions system compatibility.
Our own research on engine wear mechanisms and collaborations with OEMs, oil companies and academics mean we can develop and launch new products that can help address sustainability issues and that protect the engine throughout their lifetime in the crankcase no matter what challenges vehicle technology improvements, fuel quality or operating conditions throw at us.
It would be remiss not to discuss the impact that these trends have on additives technology.
In the future, additives will be critical to enable lubricants to function at much lower viscosities and retain their protective properties over ever extending drain intervals.
New lubricants will not only provide enhanced fuel economy via their viscometric and frictional properties, but will also enable the introduction of new engine technologies that will provide significant increases in both fuel economy and engine performance under more extreme operating temperatures.
The expanding use of multigrades and the trend to lighter viscosity grades will impact the scale and the shape of demand for viscosity modifiers. Lighter grades generally require lower treat rates of viscosity modifier polymers, but the characteristics of these polymers will be critical to maximise fuel economy and both low and high temperature protection.
Any drop in demand in developed markets that comes as a result of more narrow cross grading will be offset by overall growth in emerging markets and the trend for the latter to move away from monogrades (and heavier multigrades) to lighter multigrades that are common today in developed countries.
It may appear from the outside that predicting future viscosity trends should be straightforward. But a large amount of data, detailed market research and insight are required for these forecasts. In addition, Infineum validates current demand and now has a large repository of historic data to help in the prediction of future trends.
The improvement of fuel economy is unquestionably one of the critical drivers for change in the automotive industry and lowering the viscosity of engine oils is therefore a trend that is likely to continue.
The question that we need to help answer is how fast and how far will this trend go? Of course the only thing my crystal ball will guarantee is that no prediction is perfect and we will need to be watchful and responsive to meet future needs.