Timeline on the Fast Lube Business: A White Paper

by Scotti Lee, Ph. D.
NOLN Contributing Writer

The automotive industry is moving as quickly as it can to be “green.” The industry is using “green” views on climate change to sell new electronic vehicles.

Al Gore states that, “20 percent of CO2 is attributable to deforestation.” That is more than ALL of the world’s cars and trucks combined. With this in mind, I started asking several large firms that supply fast lube businesses what their future plans are.

I found that most of them were starting, or had started many years ago, to divert some of their business interests away from combustion engines, both gas and diesel. Why? The answer is simple. Each year we see more technology developed: hybrids, dual gas/electric and pure plug-in electric vehicles. (Side note: A company just purchased the former GM plant in Newport, Delaware, to produce plug-in hybrid-electric cars by 2010. I do not know who will purchase them, however, since the starting price is $40,000, with the top model having a price of approximately $80,000.) Hydrogen vehicles are in the testing stages; the next big step is to create the infrastructure across the country to fuel these vehicles.

So where are these large firms going? They told me they will continue to supply the fast lube industry until the end, though each year will show a reduced pace of supply as demand fades. However, they are purchasing and developing other manufacturers in such fields as electronics, batteries, motors and other related and non-related products.

We in the fast lube industry should begin looking for ways to service these new products. My rough guess is that the fast lube industry will service combustion engines for a long time. However, the decline is coming — and faster than we think. I believe as we move away from combustion engines we will move into the electronic stage of maintenance. This could involve batteries, motors, PC boards, recharging electric vehicles and refueling hydrogen units. These vehicles will still need tires, wiper blades, A/C charging, etc.

The timeline that I am about to present is not mine. It was compiled from groups that are in our field that have been asked by their companies’ boards of directors to give them a timeline to switch directions or purchase other businesses. By 2030, combustion engines will be in a major decline. This does not mean that all OEMs will stop production of the combustion engine; however, if you look at what is produced in 2010 and what will be produced in 2030, there will be a big gap in combustion engines versus electric.

Therefore, the fast lube industry and the Automotive Oil Change Association should start to do some long-term thinking and planning to help guide members toward the future of their businesses. This is NOT a game in which we can play catch-up during the last year.

While I began this paper looking for information from business leaders and vendors within the fast lube marketplace, I have since found other corroborating data from university studies that confirm the 2030 date. These academic studies came from several universities and general information supplied by several agencies within the U.S. government.

I have reviewed both study methods, and I have seen the results. Bottom line: I am not overly impressed. I will present my findings in three parts: general information, bad news and good news.

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