Kline Study Suggests Specialty Products and Innovative Marketing Offer Best Edge for Lubricant Manufacturers in North America

-- Mergers and acquisitions among independent marketers and distributors belie calm market surface --

LITTLE FALLS, NJ, August 7, 2007 – As the sales channels for the North American lubricants market continue to shift from retail to installed outlets, manufacturers and distributors are being driven to find niches and ever-more creative programs to maintain share and create pockets of growth in a mature market, according to a recently released study from Kline, a worldwide consulting and research firm.

Data in Kline’s study, Opportunities in Lubricants, North America, 2005-2007 -- Volume II: Consumer Automotive, indicate that service providers once specializing in tire sales, muffler repair, and brake service have expanded to offer all forms of routine vehicle maintenance and are competing for the same finished lubricant customers. And in response to the decline in factory warranty work, new car dealers are pushing to get the oil change business back into their service departments.

“Opportunities do exist for lubricant marketers, but uncovering them requires an understanding of the different needs of each type of installer, whether it is a quick lube center, an auto dealer, or a muffler shop,” says George Morvey, project manager in Kline’s Petroleum and Energy practice. “Providing education, sales tools, and incentive programs for outlets to sell more specialty oils and synthetics can help them maximize sales opportunities in a mature market.”

The lubricants market has appeared generally calm to most observers in the wake of the mega-deals of recent years, including Shell’s purchase of Pennzoil/Quaker State and the Exxon/Mobil and Conoco/Phillips mergers. However, Kline’s study shows that a robust level of merger and acquisition activity has continued among the independent manufacturers and distributors. These companies offer private-label products, and often less expensive and niche products, and account for an estimated 26% of the North American consumer automotive lubricants market, according to Kline’s data.

The continuing acceptance and usage of specialty products by consumers and the proliferation of diesel engines and alternative fuel vehicles means increasing complexity for marketers. “There aren’t big growth opportunities in North America like there are in India and China,” says Morvey. “But focused supplier and manufacturer support, incentives, branding, and application-specific products are all tools that can help manufacturers sell specialty products, which can give them an edge.”

Opportunities in Lubricants, North America, 2005-2007 -- Volume II: Consumer Automotive is part of Kline’s three-volume continuing analysis of the North American finished lubricants market. The other two volumes cover commercial automotive lubricants and industrial oils and fluids. For more information about this research, go to /reports/y59v.asp or contact George Morvey at +1-973-435-3378.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for nearly 50 years. For more information, visit www.KlineGroup.com.

For more information, contact:
George Morvey
Project Manager, Petroleum and Energy
Kline & Company

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