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ATF Market Trends –Understanding the ATF
AftermarketKennon Artis, Afton Chemical
96
Who Am I?Kennon Artis
• ATF Marketing Manager, North America– Position and promote ATF additives, coordinate with regional and global team
members
• Background– Non‐chemical– CPG Marketer: Military, Procter & Gamble, Capital One, Business Owner
97
Global presence $2 B turnover
~ 1,650 employees
Afton Chemical has been a key
player in the lubricant and fuel additive industry for more than 85
years
Formed in 1924 as the Ethyl Gasoline Corporation
Newmarket Corporation formed in July 2004
1924 Present
Who Are We?
Objectives & AgendaObjectives
– Share latest ATF market trends– Discuss Technical Imperatives for Using Vehicle‐Specific ATFs
• Key Market Drivers
• OEM Approaches
• Automatic Transmission Hardware Dynamics
• Automatic Transmission Fluids and Trends
• Market Dynamics & Enforcement
98
99
The Backdrop
Government Regulations• Exhaust emissions• Fuel economy
Globalization• Applicability across regions• Broad platform varieties
Overall AT System• Durability• Reliability
100
Fuel Economy – Pass. Car Requirements
Emissions & Fuel Economy ‐ Global Drivers
Improve Fuel
Economy
Change Engine Design
New AT Designs
•6+ speed planetary AT
•CVT•DCT
Many & New ATF’s
101
OEM Market Approach
103
OEMs Set the Pace for the ATF Market
• More types of vehicles / fluids• Proliferate unique OEM Requirements• More types of vehicles / fluids• Proliferate unique OEM RequirementsMulti- Vehicle ATF
• Advances / Changes in Hardware• Lower viscosity fluids• Advances / Changes in Hardware• Lower viscosity fluidsFuel Economy
• ‘Fill for Life’• Improved fluid durability -- high quality
ATFs
• ‘Fill for Life’• Improved fluid durability -- high quality
ATFsExtended Drain
Intervals
Impact of Transmission Trends on Fluids
• More types of vehicles/ fluids• Unique OEM Requirements• More types of vehicles/ fluids• Unique OEM Requirements
Multi‐Vehicle ATF
• Advances / Changes in Hardware• Lower viscosity fluids (< 6 cSt @ 100°C)
• Advances / Changes in Hardware• Lower viscosity fluids (< 6 cSt @ 100°C)
Fuel Economy
• ‘Fill for Life’• Improved fluid durability• ‘Fill for Life’• Improved fluid durability
Extended Drain
Intervals
ATF Industry Trends Affect OEMs• Fuel Economy - Tremendous pressure to deliver
– Hi-priority at all OEMs– Government-levied fines get OEMs’ attention
• OEM transmission designs are more demanding on ATFs– Higher torque– Smaller transmission sumps
• Establish ATF specifications
105
ATF Industry Trends Affect OEMs• Reliance on additive / oil companies -
– Formulations that enable the use of new hardware to improve fuel efficiency
• Stable viscometrics• Synthetic/high quality base oils
• Two Paths to Greater Fuel Economy– Hardware development– ATF optimization
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Hardware Dynamics
OEM Transmission Specifications
108
OEMs prefer unique ATFs
Vehicle Type
Performance Parameters Regulatory
Requirements
Vehicle Size
To ensure consistent quality, OEMs license their ATFs
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New Transmissions Breakdown - NA
75%
80%
85%
90%
95%
100%
CY2014 CY2017 CY2020
Red
MT
EVT
CVT
Step
Source: IHS
Share of Units
Step and CVT transmissions will remain the dominant platforms in NA
110
3-4-5 speed
AT37%6-7-8
speed AT
50%
DCT5%
CVT8%
201520 M units
3-4-5 speed
AT72%
6-7-8 speed
AT
DCT2%
CVT6%
201018 M units
20%
North America Hardware Production
Source: Afton Estimate
Ford and GM will jointly produce 9- and 10-speed transmissions beginning with the 2017 model year.
ATF Market Complexity Increases
111
2012 U.S. Auto Sales
• Top 3 comprise 50% of sales• Top 7 comprise 80% of sales
Source: Wards Auto
Fluid Trends
ATF Components
Base OilBase Oil
80‐90%80‐90%
Viscosity & Low temperature fluidityViscosity & Low
temperature fluidity
Oxidative StabilityOxidative Stability
Seal CompatibilitySeal Compatibility
Additive PackageAdditive Package
5 to 10%5 to 10%
DispersantsDispersants
Protection: EP, Wear, Corrosion, Foam,
Oxidation
Protection: EP, Wear, Corrosion, Foam,
Oxidation
Friction modifiersFriction modifiers
Seal swell agentsSeal swell agents
Viscosity Index Improver
Viscosity Index Improver
5‐15%5‐15%
Viscosity & Low Temperature fluidityViscosity & Low
Temperature fluidity
Affect Operability Temperature RangeAffect Operability Temperature Range
Shear StabilityShear Stability
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What is an ATF?
114
Additive Component: Dispersant
Role of Dispersants
Good Poor
Additive Component: Friction Modifier
117
Friction
µ too high shudder, harsh launch or stall, parts damage
µ too low slipping, heat, parts damage
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µ = coefficient of frictionFriction can be estimated and empirically calculated, but not measured.
Anti‐wear / Extreme Pressure Agents
Hardware Dependent Fluid Characteristics
Oil Pump / Valve Assembly / Torque Converter• Hydraulic fluid• Foam & aeration control
• Flow at low temperatures
• Protect sealsPlanetary Gear Set• Wear protection• Corrosion inhibition
Clutch Plates & Bands• Friction control• Friction durability• Dissipate heat
Electronics• Harness compatibility
• Conductivity
AT Control Body
Poor Quality ATF Good Quality ATF
Good quality ATF provides sufficient protection against oxidation, minimizing carbon and varnish deposits and sludge to keep the control body clean to avoid plugging of small orifices that the fluid must pass through.
AT Forward Clutch Housing
Good Quality ATF Poor Quality ATF
AT Forward Clutch Piston
Good Quality ATF Poor Quality ATF
Internal AT Metal Part
Good Quality ATF Poor Quality ATF
Foam Control
Poor Quality ATF Good Quality ATF
Wear Protection
Good Quality ATF Poor Quality ATF
Low Temperature Performance
Poor Quality ATF
Good Quality ATF
Complexity of Fluid Recommendations A MV ATF would have greater coverage in 1997 than today
129
ATFs’ Relentless Drive for Low Viscosity
7.60 7.50
6.00 6.00
6.75
5.65 5.50 5.50
4.254.50
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
KV
@ 1
00°C, cSt)
ATF Viscosity Trend
1997 2000 2005 2011 2016LaunchYear
Lower Viscosity = Fuel Efficiency
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Lower the viscosity…
- Fluid durability is key
- What could possibly go wrong?
ATF Market by Type
• Over the years, this market has remained largely unchanged…
– Unlicensed DEXRON®/ MERCON® comprises half of the market
– Multi-vehicle remains the second largest application in the market
131
52
97
63
6
ATF +3/+4
Other
DEXRON®/
MERCON®
DEXRON® -VI
Multi-vehicle
MERCON® V
17
Toyota T-IV
Total NA Market
All figures based on Afton proprietary research.
ATF Aftermarket Dynamics
NA ATF Aftermarket PortfolioPe
rforman
ce
• Higher shear stability• JASO credentials• Asian vehicles
Multi‐Vehicle
Market Segment
Low‐Vis ATFs
Multi‐Purpose
Multi‐Vehicle
• Pre‐2006 vehicles• DEX / MERC
• Licensed• DEXRON VI • MERCON LV• JASO credentials
market movement
Market Enforcement Actions
135
Enforcement Activities
Ethics Committee• Currently tests PCMO & Tractor
Letter to API:
PQIA: The Petroleum Quality Institute of America “The independent resource for
information and insights on the quality and integrity of lubricants in the marketplace”
135
136
Regulatory Actions136
PQIA Website – December 4, 2014
The North America Aftermarket - Summary
• Next-Gen OEM Hardware– Proliferation of LV fluids
• Economic Rebound– Higher price LV ATF volume is taking hold – Anticipated growth in medium-duty segment
• Aftermarket Complexity will Continue– Confusion – ATF education is paramount
• Enforcement Actions to Increase
137
Fuel Efficiency is king!
138
Stakeholder Education is Critical
OEMs Industry using fluids blended to the exacting standards of OEM vehicles –
better vehicle performance Stakeholder access to quality, consistent ATF – enhanced brand
management Fewer warranty claims
Oil Companies & Retailers Push to higher quality ATF’s – maintain / strengthen market image Assurance of quality fluids – more effective category management Satisfied drivers
Drivers Do the job right with the right ATF Fewer headaches
Education has Tangible Benefits
Questions / Discussion
