Are new oils so good that synthetic oil is doomed?
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One thing is certain, oil will always be priced at what the market can bear. That means oil will be a "blend" of what can be produced at a price people will pay.
JKH
JKH
If you look at what's happening with transmission fluids Power steering fluids,gear lubes and sealed wheel bearings, you can see that synthetic blends and full synthetics are gradually taking over. This is also happening to engine oils, abeit at a much slower rate (mainly due to profit motives by the majors and not product performance).
What you will find over the next 5-10 years is that the least expensive oil you can buy will be a synthetic (Group II/Group III), blend and that most of your high performance engines will mandate the use of synthetic oils, both Group III and PAO. This change has already occurred in Europe, as most of the BITOG listers are aware. It can and will happen in North America, once we go to significantly longer OCI's and vehicle manufacturers have to warranty their engine performance for up to 100k miles...
The total volume of engine oil used in North America has actually gone DOWN slightly, due to longer OCI's. The only growth niche in this market is synlubes, whose market share is expected to triple in the next 5-10 years.
You can take that to the bank....
What you will find over the next 5-10 years is that the least expensive oil you can buy will be a synthetic (Group II/Group III), blend and that most of your high performance engines will mandate the use of synthetic oils, both Group III and PAO. This change has already occurred in Europe, as most of the BITOG listers are aware. It can and will happen in North America, once we go to significantly longer OCI's and vehicle manufacturers have to warranty their engine performance for up to 100k miles...
The total volume of engine oil used in North America has actually gone DOWN slightly, due to longer OCI's. The only growth niche in this market is synlubes, whose market share is expected to triple in the next 5-10 years.
You can take that to the bank....
It looks to me as though we are seeing a convergence in the price and performance of common OTC oils. The mass-market synthetics are going Group III, while the mass-market oils not labeled synthetic are gaining both performance and price. If I am right, we may see the end of the synthetic (Group III) marketing distiction. We may also see the reintroduction of premium Group IV mass market products. The restoration of Syntec and M1 could certainly happen, if the oils could be retailed at a high enough price point to support premium margins.
Gedcruise,
I think your analysis is on the money, but there will continue to be room on the top tier for PAO/Ester based, extended drain lubes. For example, Amsoils market penetration is four times what it was just a few years ago and I'm sure Redline is growing rapidly as well.
I think your analysis is on the money, but there will continue to be room on the top tier for PAO/Ester based, extended drain lubes. For example, Amsoils market penetration is four times what it was just a few years ago and I'm sure Redline is growing rapidly as well.
Your "high end" synthetics will be in demand in Europe and here in the U.S. in specific markets. Many people like Amsoil's extended drain oils and many like/need/ a good racing oil like Redline. As long as Amsoil continues to make very high quality extended drain oils, I think their will be a market. Amsoil's growth has proven the demand is there.
Mobil's factory fill list has been growing every year proving that synthetics are needed for many high hp engines. So their will always be a niche market for these high end products.
Mobil's factory fill list has been growing every year proving that synthetics are needed for many high hp engines. So their will always be a niche market for these high end products.
There will always be a market for the best available. Some of us simply want to give even our ordinary cars a top tier product. You seem to be in accord with my thinking that the high end market is growing.
Have you ever read anything concerning the bifurcation of the US consumer market? The theory is that the middle market is being squeezed from both sides, with the high end and low end markets for a wide range of consumer durable and non-durable goods growing rapidly.
In terms of oil, you would expect growth for the high end product, along with growth in the low-end store brand product, with little growth in the middle. This may be what we are seeing.
Have you ever read anything concerning the bifurcation of the US consumer market? The theory is that the middle market is being squeezed from both sides, with the high end and low end markets for a wide range of consumer durable and non-durable goods growing rapidly.
In terms of oil, you would expect growth for the high end product, along with growth in the low-end store brand product, with little growth in the middle. This may be what we are seeing.
Buy the time my 8 year old is able to drive legaly I figure all oils will be GIII or higher and ZDDP in all of it's forms will have gone the way of the Dinosaur!
I thionk the dynamics are: on one hand the law of diminishing returns kicks-in, meaning the more technology and cost you put into an oil, the product only improves marginally....so why bother with NASA-grade oil when one or two oil simple changes a year will suffice? Who then needs a 4-year oci? On the other hand, mfgs do seem to want "lifetime-fill" type of serice plans.
Very good point, Audi (ha ha).
You may be right, and it may be that for a whole lot more marginal cost, you get only a slight improvement.
One question:
If, say, Amsoil or Torco or Redline formulations were made by a SOPUS or an XOM, would they be considerably cheaper to produce, and therefore to buy?
You may be right, and it may be that for a whole lot more marginal cost, you get only a slight improvement.
One question:
If, say, Amsoil or Torco or Redline formulations were made by a SOPUS or an XOM, would they be considerably cheaper to produce, and therefore to buy?
I see Murray's has stores in your area, they should have the same deals as Checkers has here in MN. Chevron conventional oil can often be purchased for $0.59/quart if you watch their online specials. Currently you can get Pennzoil Platinum synthetic for $0.99/quart with rebate (limit 12 quarts).
Kestas
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I just checked - they don't. The Murray's around here sells Pennzoil Platinum synthetic for $5.79/quart before rebate. Their advertising circular features their house brand dino oil at $1.79/quart, which is in line with my "$1.80/quart" comment. We just don't see the deals here in Detroit. I can't understand why.
Now more than ever it will be up to the marketing departments and performance to keep synthetic sales high. You have to clearly demonstrate that their is an advantage for synthetics. The boutique companies will have to go above and beyond from a performance perspective if they want to survive.
If you are talking about 20W-50 or 15w40 thats certainly possible.
5W-20 or 5w30 can be made using 100% Group II+
10W-30 can be made using 100% Group II.
If they are making a primarily GI 10w30 it will require a goood percentage of GII+ or a lesser percentage of GIII and a increased additive package.
If they are making primarily Group I 5w30 it is almost certaimly require a high percentage of GIII as a correction fluid and a top quality add pkg.
That is really odd as CSK Auto, Inc. owns Checker Auto Parts, Schuck's Auto Supply, Kragen Auto Parts, and Murray's Discount Auto Stores. Since Checker/Shuck's/Kragen seem to have the same deals at the same time, I assumed that Murray's had them as well. Must be a regional thing.
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