ILMA's clearly stated concerns about GM's proposed DEXOS specifications, and costs attached to them, reflect similar concerns expressed by the European Independents. Without clear, timely and easily accessible specification data, a competitive lubricants industry cannot be streamlined and effective.
There are inherent conflicts of interest which hinder streamlining of the sector. Understandably, lubes companies that have traditionally held special relationships with particular OEMS want to protect their considerable development and product approval investments. Equally, those companies, along with their competitors including the independents, need information about other OEM specifications to provide streamlined service support to their customers.
This issue is brought into sharp focus when considering the supply of lubricants in the European automotive aftermarket. Currently, warranty issues surrounding European Block exemption means that lubricants are defined as a "spare part". For some time, this has been challenged by lubricants businesses that want to avoid being locked out of the workshop supply chain. In his brilliantly clear and entertaining explanation at the recent Congress in Istanbul, UEIL's Jean-Philippe Monod highlighted the challenges block exemption present to lubricants suppliers.
Further upstream, the bounce we are seeing in such emerging markets as China and Brazil, contrasts sharply with some East European markets and the continued struggle in the US. Overall, there is a clear upward trend emerging - reported most recently by Kline's Milind Phadke with the prediction that lubricant demand will return to 2007 levels by 2012. Clearly in China the financial stimulus to the economy has clearly worked. In Brazil the imposition of a tax on incoming capital, to avoid excessive appreciation of the currency, is a fantastic turnaround and a real reflection of the new sense of optimism and success of the "Lula" presidency. In turn, this is matched by increased regional investment by Petrobras and greater investment by Chinese companies in exploration assets.
Sebastian Crawshaw, Chairman OATS