dexos fees: How Much is GM "Earning" ?

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the official dexos1 list: http://www.centerforqa.com/gm/dexos1-brands

You can see there is a lot of brands on it now. And, dexos1 certification means an oil has officially passed a more rigorous set of tests compared to SN-GF5, a good thing.

Its been stated in several places on the internet that GM's fee for the right to be on the dexos1 and dexos2 lists is 9 cents per quart. I assume that's correct; someone find a better reference if you can.

Lets say 1/6 of all the oil sold on the market (Walmart, Autozone, other retailers, oil change stations, dealerships, etc.) are dexos1 official. California alone consumes 600,000,000 quarts per year. See http://www.calrecycle.ca.gov/usedoil/RateInfo/default.htm#Table1 .....Assume the rest of the world consumes 5 times that much to make 3 billion quarts per year total for the planet, so that makes 500 million quarts dexos1 and dexos2 oils per year.

That means GM takes in $45 million dollars per year in dexos licensing fees.

Since the oil makers pay for the certification tests, the only expense GM has is running their abysmal website for dexos and doing basic research on which ACEA or SN or GF-5 tests to use for dexos.

dexos is defined by ASTM, ISO, ACEA, ILSAC tests on oils, as seen in https://www.aftonchemical.com/Lists/Brochure/Attachments/40/Specification_Handbook.pdf do a search on the keyword dexos to find the list of tests to do. GM is recovering their engineering knowledge I guess on which tests to pick, something bitogers could probably do for free....ha, ha.
 
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They probably make a pretty penny but I think your numbers are very high. I doubt 1 in 6 quarts of oil sold worldwide are dexos licensed. From what I gather on BITOG, 5w-30 is not a popular viscosity in Europe, Asia, Africa, or Australia. Also, dexos1 oils have to be at least semi-syn and there is still a strong conventional oil following around the world. And a good bit of oil used around the world is for heavy diesel fleets and not many of those engines run dexos1 or dexos2 oils.
 
For the average consumer it's just a few dollars here and there. What harm could it be? And what harm is it that it may have nothing to do with it's stated purpose? That's nothing new, either. You buy your GM vehicle and now you can feel better. You're being taken care of. Sound familiar?
 
And this article states that GM went from a pe-gallon royalty to a "flat" fee calculated on an oil company's market share and GM's market share per region: http://www.imakenews.com/lng/e_article001713657.cfm?x=bgKWrjF,bcNDBm4v. It goes on to state that the fee works out to about $4,000 per company per year, so count up the number of companies in your linked list, multiply that by $4,000 and you will have your income answer. How much they "make" (as in profit) from the licensing fees would be a bit harder to figure out as GM does have some costs associated with developing the test standards. I doubt they just pulled numbers out of the air (or where the sun don't shine).
 
Originally Posted By: NMBurb02
And this article states that GM went from a pe-gallon royalty to a "flat" fee calculated on an oil company's market share and GM's market share per region: http://www.imakenews.com/lng/e_article001713657.cfm?x=bgKWrjF,bcNDBm4v. It goes on to state that the fee works out to about $4,000 per company per year, so count up the number of companies in your linked list, multiply that by $4,000 and you will have your income answer. How much they "make" (as in profit) from the licensing fees would be a bit harder to figure out as GM does have some costs associated with developing the test standards. I doubt they just pulled numbers out of the air (or where the sun don't shine).


NMBurb02, you misunderstood the 5-year-old article. The $4,000 you mention is merely the first fee paid. They still pay a per-quart cost, its just that they were estimating it based on market share the oil makers had, thats all. Still about the same per-quart fee.

Originally Posted By: OneEyeJack
For the average consumer it's just a few dollars here and there. What harm could it be? And what harm is it that it may have nothing to do with it's stated purpose? That's nothing new, either. You buy your GM vehicle and now you can feel better. You're being taken care of. Sound familiar?


Its not an incredible amount, sure. I do like the spec. It ups the standards to something definable. Certainly about all the big synethetics, and most part-synthetics, already met dexos, still nice to have a spec you can point to. The oil makers want to charge a fee for every GM vehicle made since their products "support" smooth running of GM engines, right????? So if GM charges a fee, and oil makers all charge GM a fee, maybe it could be zero-sum. hmmmmm..... ideas.

For those who doubt my figures, I'm sure they can be improved. I assumed 1/6 of all the market is dexos oils, and I assumed the entire planet consumes like 5 Californias. Conservative maybe?
 
Originally Posted By: Nate1979
As mentioned above the cost per company is peanuts - $4k is nothing.

Read the article he cited. Thats not what its saying. They estimate oil sales, thats all.
 
Originally Posted By: fredfactory
Originally Posted By: NMBurb02
And this article states that GM went from a pe-gallon royalty to a "flat" fee calculated on an oil company's market share and GM's market share per region: http://www.imakenews.com/lng/e_article001713657.cfm?x=bgKWrjF,bcNDBm4v. It goes on to state that the fee works out to about $4,000 per company per year, so count up the number of companies in your linked list, multiply that by $4,000 and you will have your income answer. How much they "make" (as in profit) from the licensing fees would be a bit harder to figure out as GM does have some costs associated with developing the test standards. I doubt they just pulled numbers out of the air (or where the sun don't shine).


NMBurb02, you misunderstood the 5-year-old article. The $4,000 you mention is merely the first fee paid. They still pay a per-quart cost, its just that they were estimating it based on market share the oil makers had, thats all. Still about the same per-quart fee.

Please re-read the first three paragraphs:

Originally Posted By: GM Switches to Flat Fee on Dexos
General Motors has switched the licensing fee on its Dexos global engine oil specification from a royalty on every gallon of Dexos sold to a flat annual fee based on an oil company’s market share, a GM official confirmed to Lube Report.

Originally, licensees were to have paid a $1,000 annual fee for each product, plus a royalty of 36 cents on every gallon of Dexos they sell.

Eric R. Johnson of General Motors Powertrain, North America, said his company made the change to a flat annual fee in response to feedback from oil marketers.

As it and the title of the article clearly state, GM moved from a $1,000 annual fee plus $0.36 per quart royalty scheme to an annual "flat" fee only structure. And they did so five years ago (hence the age of the article).
 
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Originally Posted By: Shannow
How does the API work ?

for a "bare bones minimum spec" ?


API collects testing fees plus a royalty on sales.
GM just discovered a new source of revenue.

Is the oil better, maybe to some extent.
 
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The real question is how much is GM charging for the license. That article doesn't say. The previous $0.36/gallon is not necessarily the current royalty rate.
 
Originally Posted By: NMBurb02
I think your numbers are very high. I doubt 1 in 6 quarts of oil sold worldwide are dexos licensed.


I thought so too, as a Mexican oil reseller, but I ran my numbers for March and came up with 14.7 % of the oil I sold as being dexos1, almost 1 in 6. However, I think the average for all the other shops in the area is probably less than half of mine.
 
And the oil companies don't pay that. You do when you buy their oil.

Originally Posted By: Nate1979
As mentioned above the cost per company is peanuts - $4k is nothing.
 
Originally Posted By: Brigadier
And the oil companies don't pay that. You do when you buy their oil.

Originally Posted By: Nate1979
As mentioned above the cost per company is peanuts - $4k is nothing.


Oil prices haven't increased that I have noticed since Dexos came out. Care to tell us how much we as a consumer pay per quart? As far as I have seen the oil companies have taken this cost and not passed it on.
 
Originally Posted By: Nate1979
Originally Posted By: Brigadier
And the oil companies don't pay that. You do when you buy their oil.

Originally Posted By: Nate1979
As mentioned above the cost per company is peanuts - $4k is nothing.


Oil prices haven't increased that I have noticed since Dexos came out. Care to tell us how much we as a consumer pay per quart? As far as I have seen the oil companies have taken this cost and not passed it on.

Would you really notice a 9 cent per quart price increase?
 
How anybody can read that article and fail to interpret that the per gallon/per unit royalty fee structure is no longer in existence is amazing to me. A whole ton of new companies came online when they changed the fee structure from that major .36 per quart to the flat fee. Anybody who follows the Dexos list will be able to tell you that it increased exponentially within the past few years.
 
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The list of approved oils has grown exponentially as you stated, but my interest if worrying about it has declined. As my 2013 Silverado 1500 got and now my 2015 Silverado 2500 will get (both gasoline versions), is a Schaeffer 9003D 5w30 full synthetic that Schaeffer states meets the spec, but it is not on the "approved" list. If I wasn't getting a good value because of my commercial buying of a stack of lubes and greases from Schaeffer, and had to buy "off the rack", then I might concern myself with my oil selection based on the dexos thing. I just never put as much energy into worrying about it as some folks have.
 
I recently made the mistake of posting that ST synthetic was Dexos approved. It is not, but other house brand oils that I consider equivalents are.. Figure that one out. Lol.
 
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