New generation lubricants have to be developed to ensure compatibility with new generation engines and after-treatment devices, Adrian Hill, Automotive Product Manager, Morris Lubricants, told T Murrali of AutoParts Asia. Edited Excerpts:
Q: Globally lubricant manufacturers are mandated to bring in new generation oils that can enhance overall efficiency of the engine. How Morris Lubricants is addressing the emerging demand?
A: Everything these days is emissions-driven. There is increased pressure on the engine manufacturers to drive down emissions. They have to develop a series of after-treatment devices to ensure quality and control the pollutants that come out of exhausts. The biggest challenge is to develop new generation lubricants compatible with the after-treatment devices that are very sensitive to the type of lubricants and fuel. One of the biggest challenges is with the Diesel Particulate Filter (DPF). It will have to be fitted in every vehicle from 2020, to achieve BS or Euro VI regulations irrespective of the vehicle type. DPF is very sensitive to the level of ash produced by the lubricants. The old formulation of lubrications will clog and damage DPF. Therefore, the next generation lubricant is needed in the markets that will comply with Euro or BSVI regulations. They have to be after-treatment device-compatible.
Q: What is the trend in the developed markets?
A: In the UK and Europe, we have seen the Euro VI for many years. The technologies have been established and we can share the same in the new markets like India.
The next level of emission control will be CO2 reduction, which means usage of thinner oils. From the traditional 15W40 and such varieties, we are getting down to 0W30 and 0W20. We are about to launch in the UK, 0W60 for Hondas and Suzuki. These lubricants will reduce internal friction. It will result in more energy coming out of the fuel, thereby enhancing fuel economy, and containing CO2. Therefore, reducing the carbon footprint will be the next step and Morris is prepared for the next stage of emission control.
Q: The lubricant market is set to grow about 2.5 percent. Will Morris align with the industry growth or surpass it, since you have just entered a huge market. Also your global capacity is less than two percent of the industry volume?
A: For Morris as a company, India is an important market since the UK is very stagnant. It has fixed volume and the volume moves around different players in the country. Morris wants to evolve as a company, increase capacity and gain market share globally. We have to move ahead of the UK, and to achieve that we have to look for new territories. We see the Indian market as a pivotal change. It would give us the increased market growth in terms of volume, which we will never achieve in the UK. Every extra litre of oil we sell in India is a growth opportunity for us. We see a lot of expansion prospect.
While we cannot take over the market, we know it is not possible, we will operate in a niche segment, perhaps in high-end products. What we want to do to achieve that quantity of growth is to offer more technical support along with products. We practice the philosophy of supporting our products in the market by giving training and making people understand the nuances of our lubricants.
Q: Does the stabilising crude prices help in enhancing your profitability?
A: For the new generation lubricants, most of the base oils are chemically processed. The part of the crude oil used as base oil undergoes such chemical processing as hydro-cracking, hydro-treating. It changes the molecular structure of the oil to make it suitable for new generation lubricants. That is where the cost is. So the fluctuation of crude oil has very minimal impact on the final cost of the product. This is because, it doesn’t negate the very chemical processing cost. The old style lubricants such as the mineral based or group 1 products suffer the most.
Q: Is Morris present only in synthetic oil?
A: The majority of our products are based on group 2 and group 3. Group 1 is completely made of mineral oil. Even in the products that we launch in India, a lot of group 2 oil is used.
Q: Companies having captive refineries / additives manufacturing units may have some advantages. How do you compete with them?
A: The market is now shifting to group 2 and 3; the actual availability of group 1 is fading away since it does not involve big technology. Many of the base oil refineries that can produce group 1 cannot move further due to technology gaps. They can still produce fuels like diesel and petrol but not the base oils.
Q: OEMs are working on synchronised driveline oil change intervals to reduce cost of ownership. This contracts the volume and impacts the sales volume in the saturated market in which you are operating in; how are you managing the show?
A: With Euro VI and BS VI, to achieve after-treatment device compatibility, certain additive levels need to be reduced. It is necessary to reduce to the working level the additives that create ash that clogs the particulate filters, and those that poison AdBlue catalysts, to give the maximum life for the after-treatment device.
In this scenario, if the vehicle has to be taken to the next level with extended oil drain interval, a large oil sump is necessary. So there is a little bit of going back to the other way now as well. With longer drain intervals, the sump sizes are gradually increasing in order to facilitate the new generation lubricants.
Q: Has not the sump size been decreasing as the OEMs want a lean engine to reduce weight?
A: I will give you an example. If you look at passenger cars till 1990s, the average sump size was five to six litres. Now it is three to three-and-a-half. It is going back again. Therefore, we need more volume of lubricants to accomplish those emerging objectives.
Q: Are you into hydraulics and will you be introducing them in India?
A: Yes we are in hydraulics and we will be introducing them at some point in India. It may be during the next phase.
Q: Can you tell us about your R&D programmes?
A: One of the things that has changed over the decades is research and development. At one point of time the major oil companies had research and development centres. During the 1970s and 80s lot of additive companies became stronger and became prevalent and they began providing independent technologies to major oil companies. So those major oil companies, during the last 20 or 30 years, divested themselves from the R&D and went to additive companies as we do. Therefore, we do not need R&D facilities because we are using the technologies developed by additives manufacturing companies. We have access to the same technologies that the large oil companies have.
Q: In that case, do you act as a bridge between the consumer and the additives manufacturing companies?
A: Absolutely. We are a sort of additive company that caters to the end user. We also support the base oil manufacturing companies to put all the technologies together and help sell their products. Ultimately our aim is to meet the requirements of our customers, including OEMs. We as a company strictly stick to the OEM guidelines.