Despite costing almost 2.5 times more than their standard counterparts, premium engine oils continue to attract consumers based on the strong belief that a premium product provides better engine protection and prolongs a vehicle's life.
Vehicle manufacturers always have preached the virtues of taking care of a vehicle's key components, including the engine and transmission. Recent data indicates that consumers have heeded this advice by adhering to a more regular maintenance schedule. They also have increasingly chosen premium and synthetic lubricants to provide better protection.The average age of North American vehicles topped 9.45 years in 2008, up from 8.71 in 2003. Frost & Sullivan's remanufactured engine market sizing research indicates declining unit demand in the range of 0.1 percent annually until 2014. The outlook for transmission is very similar, with only a 1 percent annual growth rate predicted for the same time period.
Due to vehicle manufacturers' confidence in their products and owners' maintenance behaviors, they have extended warranties on new vehicle powertrain components. In 2007, Chrysler surpassed industry standards and provided a lifetime warranty for the first owner of the vehicle.
What's driving these changes? While direct relationships are hard to find, it appears strong indicators such as improved owner maintenance behaviors, improved component design and improved lubricant formulations are playing a role.
For instance, 69 percent of respondents to Frost & Sullivan's survey of U.S. vehicle owners' maintenance behaviors indicated performing four or more minor maintenance services in the past year. More than 80 percent of respondents stated that they conformed to the maintenance schedule outlined in their vehicle's owner's manual.
Market share and popularity for both engine oil and transmission fluid are highly influenced by the channel and service provider vehicle owners choose. Thirty percent of respondents use the brand of oil recommended or used by the service center, and 56 percent use the brand included with a particular service package. Frost & Sullivan's research indicates that Jiffy Lube and Express Lube were viewed to offer the best value for the money within the lube, oil and filter (LOF) channel. Owners recognized Midas and Meineke for the best value in the repair service channel.
What drives the service provider decision? Convenience. Vehicle owners are willing to invest in vehicle maintenance, but it must be easily accessible. In the future, providers with a high number of service centers and the best locations have the best opportunity to capture the jobs.
Frost & Sullivan's research indicates that approximately 37 percent of vehicle owners choose premium fluid brands. Top brand choices included Pennzoil, Valvoline, Castrol and Quaker State. Engine oil brand preferences tend to translate over to transmission fluids.
Women continue to play an integral role in vehicle repair and maintenance decisions. They are, however, highly influenced by what is stated in the vehicle's owner's manual. So if premium grades or synthetics are not listed, women are less likely to use them.
It appears that vehicle manufacturers' choices play a strong role in current aftermarket demand and likely will continue to do so in the future. Vehicle owners most likely to purchase premium brands are owners of specialty vehicles, luxury vehicles, SUVs and cross-over vehicles. Purchasers of premium brands are more likely to be male with vehicles that are still under warranty. This is not surprising since male respondents indicated that they were more likely to take technician recommendations for maintenance services or products and to ask specifically about product brands.