Are Euro OEM approvals really a money-making endorsement scheme?

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I have been reading a lot of BITOG, and have found it very informative. I do have a few questions that have not been answered: How does the OEM endorsement scheme work? How much do the oil companies have to pay the OEMs for their endorsements appearing on the back of the oil bottles? Is it a per bottle license fee? How much?

Why do I suspect that the OEM approvals on the back of oil bottles are really money-making endorsement schemes by the OEMs? Because of this: Mobil 1 is a highly respected motor oil brand that is currently selling multiple 0W20 products oriented at different markets. The M1 EP 0W20 product looks to be one of the highest quality products in the world by almost all accounts. It passes all of the US standards but has no European auto maker endorsements. M1 ESP 0W20 appears to be almost identical to EP but has many of the most revered European auto makers endorsements and is sells at three to four times the price. How much of that price is going directly to the endorsers? Since Mobil has proven with ESP that it knows how to formulate a 0W20 that can pass all of the European OEM’s tests, it obviously has the competence necessary. So why would it purposefully damage the EP product, knowing full well how to create a great oil? It seems more likely that Mobil did not do that, and instead is marketing a very similar product to ESP as EP in the US market but without the expensive endorsements.

From a marketing standpoint I can see the logic. In Germany, for example, people are famous for following rules, and endorsement from OEMs probably make all the difference regardless of price. In the US, price competition is everything, and oil companies probably have more credibility than auto manufacturers anyway. So paying for expensive OEM endorsements makes no sense.

So, did my imagination run wild and I dreamt this all up? Or is this the way things really work in the engine oil market?
 

Midnight Cruiser

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When an actor on TV endorses a product, he or she gets paid by the number of units sold. So when I see a bottle of oil with Mercedes or Porsche endorsements on the back, I have to assume they get paid the same way. Why would they not, of it helps to sell the product?
 
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When an actor on TV endorses a product, he or she gets paid by the number of units sold. So when I see a bottle of oil with Mercedes or Porsche endorsements on the back, I have to assume they get paid the same way. Why would they not, of it helps to sell the product?
Are we obsessing over endorsements or approvals? Which one is it?
 
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So when I see a bottle of oil with Mercedes or Porsche endorsements on the back, I have to assume they get paid the same way. Why would they not, of it helps to sell the product?
OEM approvals often work the opposite way, the Manufacturer of the lubricant either pays to run the oil through testing and pays to do all that one time to claim the approval, or they have to pay to do the testing and then pay the OEM a fee for every bottle they sell.
 

Midnight Cruiser

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OEM approvals often work the opposite way, the Manufacturer of the lubricant either pays to run the oil through testing and pays to do all that one time to claim the approval, or they have to pay to do the testing and then pay the OEM a fee for every bottle they sell.
That is what I suspected. Any idea how big those fees per bottle are?
 

Midnight Cruiser

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ACEA doesn't charge any fees for certification at all. Porsche doesn't charge for their oil licenses, either.

Although they still have to pay for testing, the Euro OEM doesn't actually get any of that testing money
It is hard for me to imagine an American CFO who would not see the opportunity to run the oil testing and approval operation as a profit center. Maybe German CFOs are different ...
 
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It is hard for me to imagine an American CFO who would not see the opportunity to run the oil testing and approval operation as a profit center. Maybe German CFOs are different ...

You asked about Euro ones, which don't charge anything.

API's fee is a pittance, and GM's dexos fee isn't really anything resembling a profit center, either. When GM first introduced dexos, Valvoline, and some others, didn't pay the fee for the license and logo and just put "meets dexos1 standards" or something. GM drastically lowered their fee and made it a flat fee rather than per bottle or gallon or however they did it before.

There is too much competition in motor oil to be able to collect any meaningful revenue from oil licensing
 

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That is what I suspected. Any idea how big those fees per bottle are?
GM DEXOS (which is NOT a European approval) is the only one that works that way that comes to mind. The Euro approvals are typically a certification/approval fee based on proof of performance of the product.

Have a look at the performance requirements for the different approvals in the Afton spec handbook:


Porsche A40 (old version):
This test will last 203 hours. The engine, and the oil, will go through:
- 4 times the simulation of 35 hours of summer driving,
- 4 times the simulation of 13.5 hours of winter driving,
- 40 cold starts,
- 5 times the simulation of 1-hour sessions on the “Nürburgring” racetrack,
- 3.5 hours of “running-in” program

Measurements on the engine and on the oil will be done at regular intervals, and the following parameter will be taken into account to grant the approval or not:
- torque curve (internal friction),
- oxidation of the oil,
- Piston cleanliness and ring sticking,
- Valve train wear protection. Cam & tappet wear must be less than 10 μm.
- Engine cleanliness and sludge: after 203 hours, no deposits must be visible.
- Bearing wear protection: visual rating according to Porsche in-house method.

Which I originally posted in this thread:

User bobbydavro, a formulator, indicated in that thread that this was the old protocol and the new one is harder, using a 500HP twin-turbo direct injected engine and he states:
bobbydavro said:
with turbo coking of oil feeds a parameter (autbahn hot shut down to cook the oil)
 

OVERKILL

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M1 ESP 0W20 appears to be almost identical to EP
While an SDS isn't a recipe, I'm not sure what prompted the formulation of that premise. They clearly show different base oil compositions in the SDS:
Screen Shot 2022-03-26 at 10.28.40 PM.jpg

Screen Shot 2022-03-26 at 10.27.13 PM.jpg


As well as having very different additive levels:
Screen Shot 2022-03-26 at 10.31.43 PM.jpg

Screen Shot 2022-03-26 at 10.31.58 PM.jpg


And the properties/specifications are also different:
EP 0w-20:
Screen Shot 2022-03-26 at 10.33.09 PM.jpg

ESP x2 0w-20:
Screen Shot 2022-03-26 at 10.33.31 PM.jpg
 

CleanSump

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Does it really even matter who pays what for what?
Either you believe the vehicle manufacturer's approvals are important or you are a conspiracy theorist. You use approved/licensed oils or you don't.
As to why Euro oils generally cost more; Ahem, Mobil 1 is within a couple of dollars when ordered online, Euro, EP, EFE, or ESP, it depends on where you shop. The crazy high prices on Amazon and Walmart are temporary wackiness that comes and goes like a roller coaster. Doesn't have anything to do with who approved anything.
 

Midnight Cruiser

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A fantastic set of responses! Thank you! My questions have been answered! I am much better informed now on how the oil testing business works. The only thing I am still perplexed about is why Mobil makes different 0W20 products for different markets.
 
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A fantastic set of responses! Thank you! My questions have been answered! I am much better informed now on how the oil testing business works. The only thing I am still perplexed about is why Mobil makes different 0W20 products for different markets.


That’s a totally different question. Consumers have different needs. Budget, type of driving, these play into which product to buy.
 
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