Run Infineon stated that China has 240 million vehicles on the road, and despite the slowdown in China’s economic growth, car sales are still increasing, and China may be the world’s most important lubricant market. However, the supplier's challenge is to understand and cater to China's unstructured and rapidly changing fuel economy and emission regulations.

Infineum made the following observations at Run Inline International's 2015 Run In Motion: Making Things Work in a Complicated World.

Although the growth rate of new vehicle sales in China has decreased with the economic slowdown in the country, the annual growth rate of vehicle sales is still 10%, and the sales volume in 2014 is expected to exceed 23 million. In comparison, sales in the United States were estimated at 16.5 million.

Among the newly-sold vehicles in China, 84% are sedans, of which sales of SUVs and multi-purpose vehicles (such as small trucks ) have increased by 36% and 47% respectively. Sales of commercial vehicles declined in 2014, and Infineum stated that this trend is mainly due to the implementation of the recent National IV emission standards.

As large-scale car fleets continue to grow, pollution is an extremely pressing issue, Infineum said. “He said that for countries with so many vehicles on the road, the biggest driving factor in promoting the [lubricant] technological transformation is the strict emission and fuel economy minimum requirements that are being implemented, namely the National IV emission standards.

This standard is equivalent to the European No. 4 standard and is being launched nationwide this year, targeting diesel vehicles. China will adopt the National Five Standard in 2018 as a national standard for diesel and gasoline engines.

Infineum pointed out that China plans to gradually tighten its control over fuel economy rules over the next decade. “Although some OEMs find it difficult to meet the minimum requirements of State V, the current system will promote the upgrading of driveline technology. All OEMs must introduce advanced technologies to meet these new stringent minimum requirements, and production is higher. The pace of quality lubricants will also accelerate."

Infineum continues to emphasize that the approval procedures for lubricants controlled by a large number of automakers in the Chinese market are various and very inconsistent. Global joint ventures mainly follow proprietary norms held by their owners, such as Volkswagen, Daimler, and GM, while domestic OEMs mainly use recognized standards such as API and ACEA.

"[For example], most local OEMs are working on producing turbocharged direct injection engines to achieve fuel economy and emissions targets. This trend may accelerate the typical API SL/GF-3 SAE 5W used today." -30 Lubricants are moving towards API SM/GF-4, API SN/GF-5 and future ACEA specifications."

The country’s heavy-duty diesel market is also undergoing significant changes in fuel regulations. “As OEMs speed up the development of engines and post-processing technologies, new lubricant specifications to improve lubricant quality may also surface,” said Infineum. “We would like to see measures to upgrade the quality of API CF-4 [lowest limit lubricants] and to lower the viscosity grade below SAE 15W-40 (the current market's major grade).”

Chris Locke, executive vice president of marketing and technology at Infineum, explained in a video broadcast in his speech the importance of China's growth strategy for the company. “Infineum is currently making new major investments to meet customer demand in the region. We opened a new business and technology center in Shanghai in July 2014 and are currently completing the new manufacturing plant in Zhangjiagang. The first stage of construction."

Although China's large coastal cities are already a key investment area for foreign market participants, Locke pointed out that as the Chinese government is paying more attention to inland areas, the overall market in China is becoming increasingly balanced. “If we look at the policies of the Chinese government, we will know that they are more focused on concentrating investment and growth in the western markets that are not as saturated as coastal areas,” he concluded. "So, as long as China continues to be the main growth driver for this industry, the basic pattern of this industry will not change."

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