The Extended Drain Interval Debate The Extended Drain Interval Debate
Motor oil, the lifeblood of the automobile, is also the lifeblood of the automotive aftermarket industry. The impact of engine oil on the aftermarket far surpasses its more than $5 billion in annual sales. The traditional oil change serves as a prompt for performing other automotive maintenance tasks, whether the vehicle owner is a do-it-yourselfer or a do-it-for-me consumer, generating billions of dollars in sales for retailers, and service providers.
However, the importance of oil to the economic health of the aftermarket gets taken for granted. This may indeed change in the coming years. Growing public misperception about the value of frequent oil changes, and confusion over severe vs. normal driving habits have moved the average oil change interval to 5,200 miles a long way from the recommended 3,000 miles. Furthermore, oil is not immune the dramatic changes in vehicle technology necessary to meet environmental and driveability demands by the government and the motorists. Taken together these changes could have a profound impact on the entire aftermarket, severely limiting industry's attempts to tap into the estimated $60 billion in unperformed vehicle maintenance.
Oil Change as a Trigger
"The oil change, whether performed by a technician at a service facility or done by the consumer at home, triggers other maintenance tasks that increase retail and service sales," said Alfred L. Gaspar, AAIA president and CEO. "The extended drain interval issue is definitely about more than just motor oil. The oil change is a catalyst; it gets consumers into service centers and retail auto parts stores. The more often consumers change their oil, the more profitable our industry will be throughout the distribution channel."
Today the debate over extended drain intervals rages on with 60 percent of consumers who believe they should change their oil every 3,000 miles and 40 percent of consumers who don't see a reason to change their oil sooner than 5,000 miles or more.
According to a Pennzoil/Quaker-State study, 92 percent of DIYers who change their oil perform other tasks including:
- 74% wash their car
- 57% check their transmission and brake fluid
- 51% check antifreeze/coolant and washer fluid
- 31% check belts
- 30% add accessories
- 24% check tires
- 15% check the air filter
The purchase of motor oil and chemicals by DIYers alone accounts for four percent of the total $162 billion automotive aftermarket sales in 2000, according to the AAIA Factbook.
DIFMers who have their oil changed typically have other procedures performed by technicians, including replacing wipers and blades, adding engine/fuel additives, tune-up services, brake service, replacing shocks and struts, draining and refilling radiators, differential services and other services.
"Assuming that the current oil change interval for DIFMers is approximately 5,200 miles, every 100-mile reduction in fast lube customers' oil change intervals delivers $105 million in sales for the industry," said Marc Graham, president, Jiffy Lube International, and chairman of AAIA. "If consumers had their oil changed at 4,200 miles, the aftermarket would realize an additional $1.1 billion."
A Question of Severity
This widespread lack of understanding is fueled by confusion over normal vs. severe driving habits. Also exacerbating the confusion are frequent consumer media reports suggesting that severe service intervals are a scam. Even some manufacturers tout extended drain intervals as a benefit of their oils or filters.
Nearly every new vehicle owners manual states that severe drivers should change their oil every 3,000 miles. Most drivers don't consider themselves to be severe drivers, although they actually are.
A consumer poll commissioned by Pennzoil/Quaker-State asked 3,300 consumers if they were severe drivers. When asked with no definition, 85 percent of the respondents assumed they were normal drivers, and only 15 percent thought they were severe. When given parameters that define severe driving, 55 percent responded that they were, in fact, severe drivers.
"There is a tremendous opportunity for our industry to educate drivers about normal vs. severe service intervals to help grow our marketplace by going after undone vehicle maintenance," said Gaspar.
All Ships Will Rise with the Tide
Over the past several months AAIA and retailer and manufacturer member companies have collaborated on extensive consumer research to determine what it will take to inspire vehicle owners and operators to want to take better care of their second biggest investment.
Initially, the objective was to determine if consumers would even be willing to listen to a message that would lead to a behavioral and attitude change toward vehicle care and maintenance. The research showed that through a strong emotional appeal, rather than a rational appeal, consumers could be encouraged to reconsider vehicle care and maintenance and take action. Based on this evidence, the campaign has progressed to the creative execution stage. Once the message execution is determined and tested thoroughly, the campaign will likely proceed to a test market phase to test the hypothesis of the national campaign. Assuming a successful in-test market campaign, the industry will be called upon to participate in a full-blown national campaign that will rival those initiatives of the pork, beef and milk industries.
Messing With the System
Unlike much of today's vehicle complicated components that cause nightmares for the wholesale and retail aftermarket, oil has continued to be an extremely simple item to sell, both in stores and service bays. There is a distinct universe of oil types and brand names that any wholesaler or retailer needs to stock in order to meet the potential needs of its customers. Further, most consumers, even those with limited knowledge of vehicle technology, can easily select an oil that will maintain the operation of their vehicle.
Of course in reality, the formulation of oil for today's high performance engines is extremely complicated and requires a significant amount of development work by car companies, oil companies, and additive producers. The beauty of the oil category has been that the complexities of motor oil have been kept behind a screen of relative simplicity. Unfortunately, the increasing sophistication of vehicle technology has not left the oil untouched and a growing controversy has been brewing between the additive producers, oil companies and vehicle manufacturers. If not resolved properly, the storm could threaten the simplicity that has benefited everyone up and down the distribution system, including the most important party, the consumer.
Going Behind the Scenes
In order to understand the composition of this brewing storm, a brief tour behind the scenes of the oil business is necessary. The tour begins the most recognized part of the oil industry: the donut and starburst labeling found on nearly all oil sold in parts stores and in service facilities. This classification system has been in place for decades, but few consumers understand what it means. However, the classification system has helped motorists and installers select the right motor oil for the right use and have ensured the products keep pace with the rapid advances in engine technology.
The donut label actually consists of three different classification systems administered by the Society for Automotive Engineers (SAE) and the American Petroleum Institute (API). While each system is separate in meaning and enforcement, both systems work together to help define the characteristics of the oil.
Deconstructing the Donut
The SAE system, which is the oldest, establishes seven distinct motor oil viscosity classifications or grades. Since oil becomes thicker at lower temperatures and thinner at higher temperatures, the lower the SAE number, the better for winter driving conditions and vice-versa for summer conditions. In the beginning, these classifications included only one number, such as SAE 5W, 10W, 20, or 30. The lower number, along with the "W" classification, indicates the oil is geared for winter driving. The higher numbers without the W indicate that the oil is geared toward summer driving. This meant that motorists would need to use different oil classifications for each season. However the development of multi-viscosity improver additives allowed for the development of one grade for all driving conditions. Hence the current classifications of 5w30 and 10W40 that allows an oil to meet the viscosity requirements of both hot and cold temperatures.
The API Engine Classification System defines the performance characteristics based on the performance of an oil under differing engine loads, speeds, and temperatures. Under this system, "S" means oil for gasoline-powered engines whereas a "C" signifies oil for diesel applications. The second letter in the code signifies the level of protection the oil provides for the engine. The lowest level of protection is "A," and the highest is "H". Current high-performing, gasoline-engine systems demand a higher level of protection from the oil; and therefore SH is recommended for most late-model vehicles.
The final part of the donut classification label is the term "Energy Conservation" which was put into place during the Arab oil embargo in the '70s. Energy-conserving motor oils were developed to reduce the internal friction of the engine and reduce gasoline usage. The industry is now demanding a second level of specifications for meeting energy conservation needs, known as "Energy Conservation II."
The motor vehicle manufacturers came to the realization that with all of the areas covered in the donut label, few consumers had any idea how to choose the right motor oil. Enter the "starburst" label, which sought to simplify the system for the motoring public by developing an additional label which signaled that the motor oil was adequate for use on late-model, high-performing engines. A starburst could only appear on the label if the oil is API SH/CD, meets energy conserving II standards and is either SAE 5W-30 or 10W-30.
The constant emissions control demands brought by the federal government have forced the car companies, through a group called the International Lubricant Standards Acceptance Committee (ILSAC), to take a more aggressive role in demanding new aggressive oil to help meet standards. This stress has led Detroit to call for a more rapid system for the development of new specifications. This demand for change however, has led to friction between the oil companies, car companies and the additive manufacturers who have normally been at the mercy of the demands of the other two.
In fact, last year, The American Chemistry Council (ACC) that represents the chemical additive industry, declared that the current system is inadequate for today's vehicles and called for a new system whereby the car companies would work with the additive companies to establish specifications for each specific engine application. The specifications developed by the additive company and the car company would be considered proprietary and would not be published, as are today's API and SAE standards. Under this scenario, there could be a different oil formulation for each vehicle engine system. Not only does this pose questions for the oil companies, but impacts further down the market and to consumers. How many different oil classifications would a retailer be forced to stock, and how would the explosion of oil SKGs in the store affect price?
However, many in the industry do not want to completely scrap a system that has worked so well over the past several years, and efforts are underway by the oil companies and vehicle manufacturers to streamline the system so that new specifications could be developed, approved and placed on the market at a faster pace.
While all parties are involved in the current negotiations, it is unclear thus far what specification system will emerge. However, it is clear that the industry from top to bottom likely will see an accelerated rate of change that will add some fire to this once serene category.
The Consumer First!
Whether it's the changes to consumer demand for oil changes or the oil itself, the category is too important to the future of the industry to take a back seat. Instead, the industry must look to take an aggressive role in educating consumers on the importance of oil to their vehicle. Such action will pay major dividends beyond the category, increasing sales to a vast array of other items. Furthermore, the industry must be alert to protect their customers from attempts by the manufacturers to reduce choice or increase price. Clearly, it is critical to the future of the industry to ensure that consumers continue to find this product both easy and affordable to purchase whether its at the quick lube or their local automotive parts store. Strong oil product sales mean everyone wins, from the consumer all the way up to the parts manufacturers.