New Line Offers Tremendous Opportunity for Dealers
History of Synthetics
In 1972, AMSOIL pioneered the synthetic lubricant industry by introducing the world’s first synthetic motor oil to pass API service requirements. Because synthetic lubricants were new and revolutionary, the market for them started small. Through the AMSOIL Dealer network, the public was slowly educated on the benefits of AMSOIL synthetic lubricants, attracting loyal high-performance and extended-drain customers along the way. AMSOIL and its Dealers owned the synthetic lubricant market, but as AMSOIL gained momentum, other lubricant companies took notice and developed their own synthetic variations. When Mobil 1 was introduced in 1974, its drain interval recommendation mirrored the AMSOIL recommended drain interval of 25,000 miles or one year, whichever comes first. Although Mobil 1 soon scaled back its drain recommendation, AMSOIL officially had competition in the synthetic motor oil market.
As an increasing number of companies have introduced synthetic lubricants through the years, the market has continued to grow. Today, synthetics comprise 7-9 percent of the total lubricant market, a sharp increase from the 5 percent share they held in 2005. Although some are recommended for extended drains, the majority are formulated and recommended for standard 3,000-mile or original equipment manufacturer (OEM)- recommended drain intervals, allowing them to be sold at a lower cost. These lower-cost synthetics have attracted an ever-growing number of customers who like the lower initial price and want the improved protection and performance qualities associated with a synthetic, but aren’t ready to extend their drain intervals.
AMSOIL has watched the competition infiltrate the market it pioneered. With 92 percent of synthetic motor oil customers purchasing synthetic products recommended for standard drain intervals, AMSOIL and its Dealers are missing out on the vast majority of the synthetic market.
Modern Drain Intervals
The oil drain interval recommendations for many of today’s vehicles extend well beyond the traditional 3,000-mile interval. Ford recommends 10,000-mile drain intervals with its 2011 vehicles, while vehicles equipped with electronic oil monitoring systems often extend drain intervals up to and even beyond the 10,000-mile mark.
Installer Market Key to Growth
Although OEM-recommended drain intervals continue to rise, the installer market has mostly been resistant to this change. In fact, 90 percent of do-itfor- me (DIFM) oil change businesses continue to recommend 3,000-mile drain intervals to their customers. The DIFM market is expected to account for 80 percent of all oil changes by 2018, and penetrating this market is essential to ensure future growth. Although AMSOIL Dealers have developed very successful installer accounts centered around XL Synthetic Motor Oils (which were developed to overcome installer objections related to price, warranty and API certification), there is still resistance from many installers who fear that extended drain recommendations limit their profit potential.
|Synthetic PCMO Market |
|Synthetic PCMO Market |
|Synthetic PCMO Market |
|Recommended for extended drain intervals, AMSOIL synthetic motor oils comprised the entire synthetic passenger car motor oil (PCMO) market in 1972. In the years since, competing synthetics recommended for OEM drain intervals have taken the majority of the market share.|
OE Meets Demand
In order to meet the demand for a lowercost synthetic motor oil, and to provide customers a stepping stone to the toptier line of AMSOIL synthetic motor oils, AMSOIL is introducing the AMSOIL OE Synthetic Motor Oil line. Priced competitively with other standard-drain synthetic motor oils, OE Synthetic Motor Oils offer the protection and performance benefits of a high-quality synthetic for OEMrecommended drain intervals, providing Dealers with a huge opportunity to reach new customers.
OE Ideal for Installer Market
AMSOIL OE Synthetic Motor Oils are ideal for capturing increased sales in the installer market. Because they are API-certified (meet API SN/ILSAC GF-5 requirements), recommended for OEM drain intervals and competitively priced, they effectively overcome all potential objections from installers. Installers now have a choice between offering their customers standard drain intervals with OE Synthetic Motor Oils, extended drain intervals with XL Synthetic Motor Oils, or both.
Because customers change oil more often with OE, both Dealers and installers stand to increase profits (see graphs).
|* Based on 15,000-mile/year national average. While most installers recommend 3,000-mile intervals, most motorists practice 4,500-mile intervals. |
Source: 2009 NOLN Operators Survey & poll of AMSOIL accounts
|* Based on 15,000-mile/year national average|
AMSOIL OE Synthetic Motor Oils are designed as an entry-level product for customers who want to move up to synthetic quality, but won’t pay a significantly higher price than a conventional product and/or aren’t initially interested in extending their drain intervals. OE Synthetic Motor Oils are an excellent door-opener for Dealers, who can later teach satisfied customers the benefits of stepping up to a top-tier AMSOIL synthetic motor oil and saving money through extended drain intervals, as well as introduce them to the rest of the AMSOIL product l
AMSOIL OE Synthetic Motor Oils will help AMSOIL and its Dealers penetrate a portion of the motor oil market that has been a more difficult sell, including the installer market, commercial fleets, cost-conscious customers and customers hesitant about taking advantage of extended drain intervals.
See the Voice-over PowerPoint Presentation in the Dealer Zone for more details about OE Synthetic Motor Oils, why they’re needed and how Dealers will benefit.