Afton Chemical - Challenging ATF Claims

Challenging ATF Claims Adam Banks, Afton Chemical

In a market that is heavily fragmented and constantly evolving, establishing claims for automatic transmission fluids can present real challenges for marketers. There is no longer one proxy industry standard for ATF, and little formal industry structure or regulation of product claims. As competition becomes more aggressive and complexity increases exponentially, remaining rigorous with claims will be a struggle for many. This article looks at some of the reasons behind these issues and questions whether the service-fill market in Europe presents a growing problem, or a potential opportunity.

Automatic Transmission Fluid (ATF) can deliver significant value as part of an automotive lubricant portfolio. Not only is the ATF segment growing across the EU, it also generates attractive margins.

For oil companies it represents a great offer completer; expertise in ATF provides opportunities to differentiate, highlight technical credibility and engender customer loyalty, all of which support long-term retention of profitable business.

of hardware – from step transmissions with an increasing number of speeds, to dual clutch or continuously variable transmissions – creates challenges for service workshops. ‘Each transmission design has differing performance requirements. Take friction characteristics, for example. It is not a simple case of maximising or minimising friction for all transmissions; rather, optimisation is the goal. The rise of electric and hybrid vehicles, with their specific lubricant demands, has complicated matters even further,’ explains Dr Harald Maelger, Senior OEM Relationship Manager at Afton Chemical.

Another layer of complexity comes from the market’s drive to reduce ATF viscosity.

Lower viscosity often results in better fuel efficiency, which is clearly desirable for OEMs and the trend has been relentless.

ATF viscosities are approaching just 4cSt in some OEM specifications.

However the ATF market is fraught with conflicting dynamics that have created a fluid ‘tug of war’. Team Simplicity stands on one side, the driving force behind multi-vehicle ATFs. These fluids meet the customer desire for speed and ease of use, and have a low risk of fluid misapplication in the workshop. Broad coverage can be achieved with clear guidance, bringing many benefits such as fewer SKUs, lower inventory levels and savings from bulk purchases.

Team Complexity, the inevitable result of a highly fragmented ATF market, stands on the opposing side. The sheer variety

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ATF’s relentless drive for low viscosity

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This market fragmentation has encouraged niche expertise and bespoke solutions have flourished.

Understandably, OEMs have remained firmly focused on fluid approvals that will address their particular technical challenges, protecting hardware and reducing potential warranty concerns.

‘Given the complexity in the current fleet, workshops in Europe may have to manage anything from 10 to 100 different technical requirements for ATF over the course of a week,’ commented Jon Burgess, Customer Technical Service Specialist at Afton Chemical.

With such strongly opposing forces in action, how best can the integrity of the ATF market and its players be protected? The most obvious answer is by applying rigour. For a thriving ATF market, all parties need to be able to trust in the fluid claims that are being made.

What does this mean for Europe? A quick look across the Atlantic to the larger and more mature US market helps to highlight where the EU is on its ATF journey.

When multi-vehicle fluids were first introduced to the US service fill market, they represented a valuable addition to the product range. They offered welcome simplicity without compromising on quality. Major OEM specifications - GM’s DEXRON® and Ford’s MERCON® – were widely used as proxy standards for this wave of ATFs, providing the necessary rigour for product development and approval. Where fluid suppliers were meeting these proxy standards, clear fluid performance claims could be made.

As adoption in the US market grew rapidly through the late 90s and early 00s, increasing competition amongst multi-vehicle ATFs led to many more performance claims associated with each brand. ‘On the surface a welcome move for consumers, these often aggressively marketed products started to raise questions about the quality and robustness of their claims,’ says Ian Macpherson, North America Marketing Director, Afton Chemical. ‘The market has now reached a point where something of a ‘frontier’ mentality operates with regard to product claims. Lower cost products are prevalent; with few active OEM specifications to use as a proxy and no industry body overseeing regulation, labelling standards are becoming a real concern.’

In 2017 the Petroleum Quality Institute of America (PQIA) conducted a survey that highlighted considerable confusion and misunderstanding of the language used for product claims: wording varied from ‘suitable for use’ to ‘meets requirements

Lifecycle of multi-vehicle ATF in the US market

Unsuitable low viscosity ATF can cause transmission damage (Industry rig test)

of‘ to ‘universal’, with ‘multipurpose’ being used as well as ‘multivehicle.’

Interestingly, California have explored legislation. Other states, such as North Carolina, have considered following. The lack of overall industry structure leaves the US market hanging in an awkward balance: some products now make different claims in different states, while others are simply not offered for sale in specific states.

The confusion identified by PQIA is reflected in a sample of claims lists examined by Afton. ‘The claims lists we’ve looked at often mix up transmission types, part numbers, specifications and fluid names. We’ve even seen typos from one claim being duplicated in claims from other suppliers!’ confirms Burgess.

Does this matter? Absolutely. The potential risk of using unsuitable fluids in transmissions is too great to be ignored.

For example, a fluid with viscosity that is too low has the potential, when taken to the ultimate conclusion, to impact transmission components catastrophically.

This leaves the door wide open for future warranty issues, risking the reputations and the finances of all involved; additive companies, oil companies, workshops and transmission OEMs. The US multi-vehicle ATF market could face challenges if it does not move to protect itself, and legislators will move in to take a look.

Implications for the European ATF market are clear as it starts to follow the same growth profile. Despite traditionally favouring manuals, the EU has recently seen significant and sustained growth in automatic transmissions.

This growth is seen across all European countries, even staunchly manual markets such as France. As more vehicles navigate for you, park themselves and automatically avoid collisions, it’s possible that consumers in these countries are becoming more comfortable with relinquishing control, overcoming entrenched driver preferences for manually shifting gear.

The increased competition and product proliferation that has impacted the growing US ATF market now threatens to affect the EU market. To best avoid these issues, the EU needs to tackle this in a unified way and consider how best to add rigour to its product claims.

In the US, the SAE (Society of Automotive Engineers) is now exploring the possibility of a single US industry standard.

‘Whether one standard is possible to achieve in such a fragmented market, with narrow OEM-specific friction performance requirements is doubtful,’ Dr Maelger feels. Achieving a single standard could simplify offers and allow efficiencies in supply; but at the same time it could also undermine oil marketers’ opportunities to differentiate themselves and their products.

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What needs to happen next in Europe if we’re to avoid the same uncertainty and legislative intervention that we have seen in the US market? These challenges unite oil companies, workshops, transmission OEMs and additive suppliers, and everyone should be a part of this important conversation. Ensuring the ATF market retains integrity during its growth phase without attracting excessive legislation is critical and, if we fail, the fallout affects everyone including OEMs.

EU is going automatic

Given the unlikelihood of a single industry standard being feasible, specifying which product claims can or cannot be made under which circumstances is a positive step forward for Europe. Tim Bates, Technical Committee Chairman of the Union of the European Lubricants Industry (UEIL) has clarified the current ATF position in Europe following a number of EU regulations.

In a similar move, the US National Council for Weights and Measures (NCWM) defined ATF labeling rules in July 2017.

These dictate that claims must be clear and accessible, and that marketers must have the data to support their claims – this can include additive suppliers’ field data as well as other validation.

Finally, fluid conformance does not entitle suppliers to ignore OEM licensing obligations. The prevailing response of US ATF marketers to these rules appears to have been relief. Holly Alfano, CEO of the Independent Lubricant Manufacturers Association (ILMA), confirmed that ‘ILMA actively supported the provisions’ and welcomed the NCWM’s lack of discrimination against multi-vehicle ATFs because they are ‘helping to manage an increasingly complex service fill market’.

Licensed OEM approvals are another way to help maintain confidence in the ATF service fill market as it grows in Europe. At present only GM’s DEXRON® and Ford’s MERCON® have an accessible system of licensed approvals for passenger car ATF. Once approvals are obtained, product claims can be enhanced by the use of OEM protected trademarks. ‘Although the interest of OEMs may currently lie in driving sales

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of their own genuine fluids, in future OEMs may wish to start considering their contribution to a healthier and higher quality market by exploring licensing options with the support of their partners,’ suggests Burgess.

Although specifications are important, they are not the only source of product claims. Closer technical support from an additive partner can offer a perfect opportunity for marketers to differentiate their products from the competition. ‘Talking about added value in other areas can generate deeper interest in a product: be it the tangible performance benefits that appeal to drivers; clear application guidelines for service technicians or minimising risks for workshop managers,’ advises Macpherson. ‘While robust spec-based claims will help the ATF market to thrive, it’s added value claims that will help quality ATF products to flourish.’

UEIL update: 1. “OEMs must provide all technical information, including technical specifications on lubricants and other functional fluids, to whomever services or uses these products to enable correct application.”

2. “If a vehicle manufacturer wants to contest the use by you of a specific lubricant, it is its responsibility to prove that this lubricant does not meet the Vehicle Manufacturer’s technical requirements” 3. “A lubricant manufacturer who produces a fluid which fully meets the requirements of a technical specification can indicate on their documentation that the product meets this specification.”

4. “An OEM cannot oblige a lubricant manufacturer to go through an approval procedure to be able to do so. It can only prevent a lubricant manufacturer from claiming their product has formal approval if it is not

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The first and most important step is to ensure clear and robust labelling standards. The UEIL has gone some way towards outlining what constitutes an acceptable marketing claim, but large swathes of uncertainty still exist that require the application of judgement; this is where the potential for continued conflict and confusion lies. The second step is ensuring that all partners work sufficiently closely with technology providers to ensure an appropriate level of rigour for product testing and consequent marketing claims.

Everyone involved needs to ask themselves this question: do I fully understand the performance claims I am making and am liable for? Ultimately, if you are not challenging ATF claims then those claims will end up challenging you.

LINK www.aftonchemical.com