By Tim Sullivan
 
Valvoline significantly increased its share of oil changes performed by independent quick lubes, according to results of a survey conducted by an industry magazine. The survey, by National Oil and Lube News, also found that quick lube profit margins improved this year, despite a slight decrease in customer traffic.
 
National Oil and Lube News, which is based in Lubbock, Texas, conducted its annual survey during the summer and published findings in its September issue. Responses were divided into two categories – those from owners with less than 30 centers and those with more than 30. Most of the locations in the large-chain category are owned or franchised by large motor oil marketers and therefore market their own brand of oil primarily or exclusively. Smaller chains are mostly independents and therefore not tied to particular brands.
 
This year’s survey showed Valvoline claiming 20 percent of oil changes by locations in the smaller category – second-highest and a big jump from the 12 percent share it had in 2003. Valvoline’s gains appeared to come at the expense of Pennzoil and Castrol. Pennzoil is still the segment’s leader, with a 28 percent market share, but that was down from 31 percent last year. Castrol’s share fell from 10 percent to 7 percent, tied for fourth with Mobil. Quaker State’s rose from 11 percent to 12 percent, keeping it in third place.
 
NOLN Associate Publisher Barbara Tinsley said Valvoline’s success may be due, at least in part, to increased marketing for the independent quick lube segment.
 
“They seem to have become more aggressive in the past year or so,” she said.
 
Of course, results for the small chain category exclude a huge chunk of the overall quick lube market. For example, the Jiffy Lube chain has well over 2,000 locations, most of which offer Pennzoil. Several other motor oil marketers have chains with hundreds of centers.
 
Mobil 1 continues to be by far the most popular product for independents installing synthetic motor oil. The brand claimed 55 percent of synthetic changes by operators with less than 30 locations, up from 53 percent last year. Quaker State was a distant second, with 11 percent of changes, followed by Castrol with 9 percent and Valvoline and Pennzoil, both with 8 percent. Those rankings shuffled the results from the 2003 survey, when Pennzoil, Castrol, Valvoline and Quaker State placed second through fifth, respectively.
 
This year’s survey found that prices for full-service oil and filter changes rose slightly for both small and large chains – to $27.36 and $29.44, respectively. Cost of goods for those services also rose – to $9.13 and $6.82. The number of vehicles that centers need to serve in order to break even also increased. The break-even count for small chains was 24 vehicles, for large chains 26.1.
 
The number of cars actually served dipped for both categories. Chains with less than 30 locations served an average of 37 vehicles per day, those with more than 30 an average of 36.7.
 
These trends weighed heavily in Editor Garrett McKinnon assessment of the industry, as he concluded, “[T]he fast lube industry is a picture of good health.”
 
NOLN’s 2004 survey results are based on responses from 433 quick lube operators representing more than 4,800 locations. A report with results from the past five surveys is available for $65 to non-subscribers. For information, call (800) 796-2577 or visit the magazine’s website: www.noln.net.