Market Trends in the Automotive Industry...Changing Passenger Vehicle Landscape Advanced hardware...

The Lubrizol Corporation© 2019 The Lubrizol Corporation

Market Trends in the Automotive

Industry

Kailash Sawant, Lubrizol

11TH April 2019


Agenda

• Market Drivers

• Evolution of vehicle technologies & hardware.

• Specification changes

• Effect on lubrication & formulating challenges

• Summary


The world continues to change

Creating the need to develop new services, new technology, new lubricants and fuels

3

Efficiency Reliability Wellness

• Minimizing environmental

impact

• Creating more efficient

products, processes

and services

• Maximizing the useful

life of equipment

• Minimizing repair

and replacement

• Ensuring equipment

operates as intended

• Improving the environment

in which people live

• Minimizing wastage

and resource usage

• Enabling access to

products and services

which improve lives

New legislation, regulations and evolving consumer preferences drive change


Regulations in the Middle East

A slow fragmented approach to emissions legislation has the potential to accelerate

Global OEM platforms, newer vehicles and fuel quality

changes will allow adoption of new specifications and

tighter emissions controls in line with global trends

• Turkey adopted Euro 5/V limits

in 2012 and requires ULSD

• Saudi Arabia announced API CH-4

as the minimum specification for

diesel commercial vehicles


Improving Efficiency

Regulatory impacts are not incremental

This will lead to greater use of lighter viscosity, lower SAPS lubricants, higher quality BO.

Notes 1. RDE is an acronym for Read world Driving Efficiency, a test cycle for emissions performance which is conducted on the road

2. WLTP is an acronym for Worldwide harmonized Light vehicle Test Procedure which replaces the New European Drive Cycle (NEDC) in the EU

3. Current limit based on the NEDC test cycle and this may be changed once the WLTP test cycle is adopted

Sources : ICCT, Dieselnet, China Ministry of Environmental protection

New legislation will lead to a greater emphasis on efficiency improvement

Tailpipe emission reduction

– Proconve L-6 standard in Brazil

– EURO 5a in Argentina

– Phase in of Tier 3 in the USA

– BS VI in India by 2020

– RDE1 and WLTP2 in the EU

CO2 emission reduction

– 95g/km3 in the European Union by 2021

– Phase III fuel economy legislation in China

– 54.5 mpg in the USA by 2025


Engine Technology Drivers

Complex combination of new vehicle hardware technologies

Government

CO2

Mandates

Consumer

demand for

cost savings

NOx and PM

Legislation

DownsizingTurbocharging

Driving Factors

Effect on Engine Hardware

DPF

Fuel

InjectionEGRSCR

Diesel Particulate

Filters

Selective Catalytic

Reduction

Raised Top RingsExhaust Gas

Recirculation

Turbo-

ChargingInjection Strategy

Higher temperatures and

pressuresHigher soot and acid

levels

Susceptible to poisoning

and blockage

Efficiency Efficiency/Emissions Emissions

API CH-4 API CI-4 API CI-4 Plus API CJ-4/CK-4


Impact on Heavy Duty Diesel Lubricants

0%

10%

20%

30%

40%

50%

60%

15W-40 10W-XX 5W-30 Low HTHS

2016 57% 31% 12% 0%

2025 31% 33% 25% 12%

% M

etr

ic T

onnes (

Estim

ate

d)

2016

2025

EU-28 less Bulgaria, Cyprus, Russia, Ukraine & Malta plus Iceland, Norway, Switzerland, Turkey

Source: Lubrizol analysis. Based in part on content supplied by IHS Markit – Worldview, 2018

We expect that ~80% of HD vehicles in the region are European in origin

This data represents the European market, shift away from 15W-40 grades. Other markets will follow.


Impact on lube quality

• Specifications are coming thicker and faster:

• Numerous major industry lubricant upgrades

are forthcoming

– ACEA 2016 2018

– API CK-4/FA-4

– GF-6

It is becoming increasingly complex for a lubricant to tackle these challenges


API CH-4 to CK-4

BoreProtection

Corrosion

AftertreatmentCompatibility

OxidativeThickening

PistonDeposits

Soot

Wear

Fuel Economy

API CH-4

API CI-4 Plus

API CJ-4

API CK-4

OEM’s Response to tightening GHG standards:

CK-4

FA-4Challenge for

HD Lubricants


ACEA & OEM Specifications

E4E7

Daimler 228.5Daimler 228.3 Daimler 228.51Daimler 228.31

Volvo VDS-3 Volvo VDS-4 → VDS-4.5

MAN M 3477, 3677MAN M 3277MAN M 3275 MAN M 3575

Daimler 228.61

Volvo VDS-5

MAN M 3877

“F”E6E9

API CI-4, CI-4 Plus API CJ-4 → API CK-4 API FA-4

Euro V/VI + DPF (+ SCR/EGR) Euro IV/V + SCR/EGR

HTHS@150°C ≥ 3.5 mPa.s HTHS@150°C ≥ 2.9 & ≤ 3.2 mPa.sFuture ACEA F engine lubricants will provide higher levels of durability,

protection and fuel economy


Changing Passenger Vehicle Landscape

Advanced hardware requires advanced lubricants. Analogous story for HDMO.

2003 2018

Engine 1,781 cc, NA PFI

Power 74 kW

Torque 155 Nm

Transmission 5 MT

Curb Weight 1,210 kg

0 - 100 km/hrs 13.4 s

Fuel Economy 7.1 L/100km (90 km/h constant)

Engine Oil SJ 5W-40

Engine 1,798 cc, TGDI

Power 132 kW

Torque 300 Nm

Transmission 8 Speed AT

Curb Weight 1,580 kg

0 - 100 km/hr 8.5 s

Fuel Economy 5.2 L/100 km (90km/h constant)

Engine Oil VW 502 00 5W-40


Growing passenger vehicle PARC

New hardware will demand higher performance lubricants

Between now and 2023 over 26 million new light vehicles will enter

the Middle East car parc

A high percentage of new

light duty vehicles will utilize

• Direct Injection

Gasoline engines

• Turbochargers

• Gasoline Particulate

Filters

Source : IHS AutoInsight


TGDi Engine Technology

TGDi engines require advanced chemistry and base oil technology

• Environmental concerns are driving the use

of turbocharged gasoline direct injection

engines (TGDi) engines around the world

• These more efficient engines create a much

tougher operating environment for the

lubricant

• Lower tier traditional API categories

can cause major issues in TGDi engines

– Example: Catastrophic failures due to low

speed pre-ignition (LSPI)


Fastest Growing Engine Type Needs New Lubricants

Field data proves previous oil specifications

were inadequate for GDI engine technology

An unacceptable situation for OEMs and vehicle owners

OEMs can no longer wait, enacting:

• GM dexos1TM Gen 2

• API SN Plus

• European OEMs

• Future ACEA


SN Plus vs GF-6

• GF-6 is a new ILSAC category that will supersede GF-5

with replacement tests for the Sequence IIIG, IIIGA,

IIIGB, IVA, VG, and VID as well as two new tests coming

on line, Sequence IX (LSPI) and Chain wear.

• SN PLUS is a new API category supplement that will still

make use of the sequence IIIG, IVA, VG, VID, and VIII (or

approved replacement tests), plus the Sequence IX

(LSPI)

‒ SN PLUS may be applied to any API SN license

‒ SN and SN-Resource Conserving will still be licensable

without PLUS.

‒ No impact on GF-5 licenses


Leading Brands Globally are Adopting API SN Plus Quickly

Source: Public websites


Multi-Dimensional Formulating Challenges

Today’s lubricant challenges require modern additives and base oils

Formulating modern lubricants is extremely complex

Factors include:

• The quick rate of new specification introduction

• Specifications now governed by dynamic viscosity

profiles (HTHS) and performance

• Rise of ultra low viscosity fluids

• Environmental and regulatory restrictions on raw materials

• Expanding number of OEMs

• Qualifications becoming increasingly ‘formulation specific’


Summary

It’s an exciting and dynamic time to be part of the lubricant industry!

• Regulatory drivers continue to shape vehicle hardware and lubricant performance

• Global OEM platforms will drive more consistency globally

• The Middle East lubricant market would catch up rapidly

‒ Impacts base oil and additive needs

The Lubrizol Corporation

Your trusted source for market trends, industry insights and

the lubrication challenges of today’s advanced hardware

lubrizoladditives360.com

© 2019 The Lubrizol Corporation

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Market Trends in the Automotive Industry...Changing Passenger Vehicle Landscape Advanced hardware...

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