European Engine Oils

Passenger Car Market Overview

Market Drivers
The Western European passenger car engine oil market continues to undergo a period of dramatic change as the result of three factors:

Market Structure
The European passenger car engine oil market may be segmented by many factors including performance, specifications, viscosity grade, base oils, elemental limits and aftertreatment system compatibility. Figure 1 illustrates Lubrizols segmentation of this market into three broad market tiers, each with distinct performance and value characteristics.

Emissions
Changing European Union (EU) emissions legislation, designed to reduce potentially harmful vehicle exhaust emissions, is resulting in new engine designs and aftertreatment systems being introduced by OEMs. The introduction of Euro 4 in 2005 resulted in the usage of new advanced aftertreatment systems such as diesel particulate filters (DPF). These required new lower SAPS engine oils, which provide increased compatibility with aftertreatment systems, to be developed. The move to Euro 5 in 2009 will result in even greater usage of aftertreatment systems.
Figure 1 Passenger Car Engine Oil Market Structure

Fuel Economy
The demand to increase the fuel efficiency of vehicles is not only to reduce fossil fuel consumption but also to reduce carbon dioxide (CO2) emissions. From 2012 the EU proposes to begin phasing in a system of fines for OEMs based on the CO2 emissions of their vehicles above 130 g/km. To minimise these fines OEMs will need to make further improvements in vehicle and engine design. OEMs will also look to the engine oil to improve fuel economy where a 1% improvement could result in a reduction of over 1.5 g/km of CO2.

Top Tier
This premium market tier represents the highest levels of engine oil performance seen in the European market. Predominantly 5W-30s, these engine oils are designed to operate in vehicles with the latest aftertreatment systems. They may be characterized by the requirements of the ACEA C Sequences upon which many of the latest OEM specifications are built. This tier may be further segmented by SAPS level (Mid or Low) and by HTHS (>3.5cP or <3.5cP) with the low (<3.5cP) HTHS segment designed for applications requiring higher levels of fuel economy improvement. Demand for top tier engine oils is growing quickly as new cars enter the service fill market.

Durability
The introduction of new engine designs, aftertreatment systems and fuels are making the environment in which the engine oil operates increasingly severe. As a result engine oil durability must be increased to ensure that the engine oil continues to perform as required. These three factors continue to result in the need for new engine oil technology, designed to operate in vehicles with the latest aftertreatment systems, while delivering ever greater durability and fuel economy improvement.

Upper Mainline
A premium performance tier of mainly 5W-40 and 5W-30 engine oils designed for high performance applications (including turbo charged gasoline and direct injection diesel) where advanced aftertreatment system compatibility is not required. They may be characterized by the requirements of the ACEA A/B Sequences, particularly A3/B4 and A5/B5, upon which many OEM

specifications are built. This tier may be further segmented by HTHS (>3.5cP or <3.5cP). Although the majority of cars requiring this quality of oil are now over 5 years old demand for upper mainline engine oils remains strong. Most recently 10W-40s have upgraded in performance to meet the basic requirements of this market tier through the inclusion of direct injection diesel performance.

and 0W-30) will continue to increase at the expense of the heavier grades (20W-50, 15W-40 and 10W-40). This change in demand will impact the types of base oil required in the market as illustrated in figure 3. Increased usage of 5W-30 and 5W-40 will result in greater demand

Mainline
A lower performance tier which covers a wide range of applications from basic fit-for-purpose engine oils to 10W-40s meeting ACEA A3/B3 and a limited range of basic OEM specifications. Mainly used in older vehicles demand for these engine oils is falling quickly as the vehicle parc evolves and the older car fleet becomes one which requires a higher performance engine oil.

Market Demand
The change in engine oil demand by market tier, viscosity grade and base oil type has changed significantly in the last 5 years. The introduction of new engine oil requirements for aftertreatment compatibility, greater
Figure 3 Change in demand by API Base Oil Group

for API Group III base oils. Demand for higher performance, yet cost effective, 10W-40 will result in a growth in demand for API Group II base oils whilst the fall in demand for 15W-40 and 20W-50 will reduce the demand for Group I considerably,

Market Outlook
The passenger car engine oil market will continue to change over the next 5 years. Emissions, durability & fuel economy requirements will continue to drive demand for higher value engine oils with lighter viscosity grades, higher quality base oils and new innovative additive chemistry. In the short term, demand for top tier lower SAPS engine oils will continue to increase rapidly and is forecast to represent over a third of all engine oil demand by 2010. As oil changes are carried out on Euro 4 vehicles it will be essential to ensure that the right engine oil is used to protect the aftertreatment system and maintain the emissions compliance of the vehicle. For further information on changes in the passenger car engine oil market see www.lubrizol.com\ACEA2008.

Figure 2 Change in demand by viscosity grade

durability and fuel economy improvement have resulted in a change in the types of engine oil used in Europe. Figure 2 illustrates the relative change in demand by viscosity grade that Lubrizol expects to see over the next 5 years. As demand for top tier engine oils continues to increase and be maintained for upper mainline engine oils demand for the lighter viscosity grades (5W-40, 5W-30