Lubrizol is a leading lubricant additive technology and viscosity modifier specialist. The company is at the heart of the impending emission norm changes and sees tremendous opportunities from April 2020 and beyond. Mr. Kailash Sawant, Regional Business Manager – Engine oils, India & Middle East, Lubrizol, divulges details.
Excerpts:
Market impact
In order to meet the tight BS-VI limits for particulate matter, all commercial vehicles will have to be fitted with after-treatment devices such as Diesel Oxidation Catalyst (DOC), Selective Catalytic Reduction (SCR), Diesel Particulate Filter (DPF).
The use of DPFs will necessitate the use of specially-formulated engine oils containing lower levels of Sulfated Ash, Phosphorous and Sulfur (SAPS) as use of conventional engine oils which contain higher levels of SAPS will not be compatible with the DPFs.
For the lubricant additive industry, launch of these ‘Lower SAPS’ engine oils would mean usage of modern chemistries and components. This would thus be a revolutionary change as the industry will move away from more conventional technologies.
Lubrizol has decades of experience in formulating lower SAPS engine oil technologies and is very well prepared and positioned to help our customers and partners respond and upgrade their products to meet the upcoming requirements today and in the future.
Challenges
It is certain that BS-VI will bring in additional costs for the vehicle manufacturer. Hence, optimizing the vehicle’s total cost of ownership will be the biggest challenge.
Availability of BS-VI fuel across the country would be another key issue which most likely should be sorted out.
For oil marketers, careful understanding of severity aspects specific to India, will be required to be factored in as they work towards building engine oil formulations to meet the needs of future vehicle hardware.
The other key challenge will be educating the vehicle owner, mechanics and trade channel on the importance of using the right engine oil, i.e., lower SAPS diesel engine oils as usage of conventional diesel engine oil can block the diesel particulate filters and have serious impact on the overall vehicle efficiency.
Tackling cost increase
We believe the following measures can be expected to be taken by vehicle manufacturers in order to mitigate cost of ownership and enable smoother transition:
- Retain oil drain intervals at today’s levels as a minimum and extend wherever possible.
- Improve on overall vehicle fuel economy by adoption of fuel economy lubricants.
Opportunities
The BS-VI adoption will certainly bring the obvious benefit of cleaner air, however we see the fuel economy mandate (applicable from April 2023) bringing in lot of value to key stakeholders.
- Government: Fuel economy mandate will help save millions from the import bill.
- Vehicle owner: Adoption of fuel economy lubricants by vehicle manufacturers will help in lowering of total cost of ownership.
Outlook
The new axle load norms which got implemented in 2018 have resulted in better utilization of the existing vehicles further impacting the need for newer vehicles. This coupled with overall economic slowdown, partially due to NBFC crisis, has affected the demand for new vehicles, automotive parts and production of intermediary materials.
At this juncture, it is also important to note that one of the key focus of vehicle manufacturers in the second half of the year will be to maintain suitable inventory to ensure they comply with government’s mandate of not allowing any sale of BS-IV vehicle from April 2020 onwards. Hence, we believe volume recovery may be unlikely to be as sharp as in the past, unless there is strong support from the government.