Quote:
Subject: Update on Dexos
Here is an update on the continued development of GM’s Dexos:
*2 additive companies (Lubrizol, Infineum?) presented their “Demonstration Programs” to GM and oil marketers
*This happens during the “Technology Demonstration Period” of a newly proposed spec
*GM approved the program and is moving forward to implementation, announcement coming soon
*The final step is “Commercializing” the specification after presenting to oil marketers
*Technical programs included use of 100% group III syn base stock
*May be able to use a mix of grp II+ & III, but not yet determined
*Lubrizol contracted with Steve Ames (BP base oil) to review group III supply
*Steve felt there was ample grp III supply due to the increase in production in Korea and Europe
NOTE: The U.S. lubricant market will now be reliant on foreign base oil supply
*Dexos is estimated to initially cost 30% more than GF-4
NOTE: Oil marketers will add additional margin, as is usually the case with a new category
*GM anticipates the product to be priced between GF-4 and a “Mobil 1”
*ExMo, Castrol Valvoline pushing back on Dexos: “commoditize” the synthetic market, reduced margins
*GM expressed continued focus and push towards extended drains (hence more robust engine oil)
*They will more than likely recalibrate the algorithm on OLM to further extend service life
*They did this with the intro of GF-4
*Dexos will be backward compatible and recommended for older GM vehicles
*GM wants to keep cars out of dealerships to lower expenses on warranty repairs
*May need Moly in 2011 when fuel economy test goes to Seq VI D (uses GM Cadillac CTS 3.6L)
*They will initially use the GF-4 Seq VI B test
*Moly will add another 20% to Dexos cost in 2011
*Dexos formulation is MORE robust than GF-5
*Tighter limits than GF-4’s Seq VG sludge protection and Seq IIIG weighted piston deposit tests
*Dexos uses ACEA (European) and proprietary Opel (GM) test OP-1 for these parameters
*Dexos is moving towards a “European” oil formulation
NOTE: GM plans to sell 75% of their fleet OUTSIDE the U.S.
*The weighted piston deposit requirements is facilitating the push towards grp III base oil
*GF-5 has tighter fuel economy requirements than Dexos
*GF-5 will use 300-500 ppm of Moly as a friction modifier
*They have gone through the periodic table looking for an alternative to Moly, no solution yet
NOTE: Moly has been known to cause turbo charger deposits when used at high saturation levels
*Both GF-5 and Dexos will use a large amount of organic friction modifiers
*Dexos and GF-5 are moving in opposite directions
*Dexos towards oil robustness, GF-5 towards improved fuel economy
NOTE: GM may be in trouble when CAFÉ standards are reduced
NOTE: It will be a large technological challenge for a product to meet BOTH specs
*How will this affect the installer’s strategy and business model? European Installer model?
*Consumers want extended service intervals, but will they want to pay for it?
*Is there ample Group III base oil supply for both GF-5 and DEXOS demand? Market prices?
*With increased demand and limited supply for Moly, pricing will escalate
__________________
L
Subject: Update on Dexos
Here is an update on the continued development of GM’s Dexos:
*2 additive companies (Lubrizol, Infineum?) presented their “Demonstration Programs” to GM and oil marketers
*This happens during the “Technology Demonstration Period” of a newly proposed spec
*GM approved the program and is moving forward to implementation, announcement coming soon
*The final step is “Commercializing” the specification after presenting to oil marketers
*Technical programs included use of 100% group III syn base stock
*May be able to use a mix of grp II+ & III, but not yet determined
*Lubrizol contracted with Steve Ames (BP base oil) to review group III supply
*Steve felt there was ample grp III supply due to the increase in production in Korea and Europe
NOTE: The U.S. lubricant market will now be reliant on foreign base oil supply
*Dexos is estimated to initially cost 30% more than GF-4
NOTE: Oil marketers will add additional margin, as is usually the case with a new category
*GM anticipates the product to be priced between GF-4 and a “Mobil 1”
*ExMo, Castrol Valvoline pushing back on Dexos: “commoditize” the synthetic market, reduced margins
*GM expressed continued focus and push towards extended drains (hence more robust engine oil)
*They will more than likely recalibrate the algorithm on OLM to further extend service life
*They did this with the intro of GF-4
*Dexos will be backward compatible and recommended for older GM vehicles
*GM wants to keep cars out of dealerships to lower expenses on warranty repairs
*May need Moly in 2011 when fuel economy test goes to Seq VI D (uses GM Cadillac CTS 3.6L)
*They will initially use the GF-4 Seq VI B test
*Moly will add another 20% to Dexos cost in 2011
*Dexos formulation is MORE robust than GF-5
*Tighter limits than GF-4’s Seq VG sludge protection and Seq IIIG weighted piston deposit tests
*Dexos uses ACEA (European) and proprietary Opel (GM) test OP-1 for these parameters
*Dexos is moving towards a “European” oil formulation
NOTE: GM plans to sell 75% of their fleet OUTSIDE the U.S.
*The weighted piston deposit requirements is facilitating the push towards grp III base oil
*GF-5 has tighter fuel economy requirements than Dexos
*GF-5 will use 300-500 ppm of Moly as a friction modifier
*They have gone through the periodic table looking for an alternative to Moly, no solution yet
NOTE: Moly has been known to cause turbo charger deposits when used at high saturation levels
*Both GF-5 and Dexos will use a large amount of organic friction modifiers
*Dexos and GF-5 are moving in opposite directions
*Dexos towards oil robustness, GF-5 towards improved fuel economy
NOTE: GM may be in trouble when CAFÉ standards are reduced
NOTE: It will be a large technological challenge for a product to meet BOTH specs
*How will this affect the installer’s strategy and business model? European Installer model?
*Consumers want extended service intervals, but will they want to pay for it?
*Is there ample Group III base oil supply for both GF-5 and DEXOS demand? Market prices?
*With increased demand and limited supply for Moly, pricing will escalate
__________________
L
