European Engine Oils Passenger Car Market OverviewMarket DriversThe Western European passenger car engine oil market continues to undergo a period of dramatic change as the result of three factors: EmissionsChanging 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 ofnew 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 ofaftertreatment systems. Fuel Economy The demand t o 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. 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. Market StructureThe 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 Lubrizol’s segmentation of this market into three broad market tiers, each with distinct performance and value characteristics. Top Tier This premium market tier represents the highest levels ofengine 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 characterize d 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. 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 Figure 1 – Passenger Car Engin e Oil Market Structure
