dexos fees: How Much is GM "Earning" ?
- Thread starter fredfactory
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Originally Posted By: Dallas69
Its easy to see a 9 cent per qt increase.
I don't know why you can't.
Maybe if every oil was priced exactly the same and prices never fluctuated for other reasons, such as inflation, supply/demand, season, geographic area, retailer pricing variations, manufacturer promotions, etc., then I would be able to easily see this 1-2% price increase.
Its easy to see a 9 cent per qt increase.
I don't know why you can't.
Maybe if every oil was priced exactly the same and prices never fluctuated for other reasons, such as inflation, supply/demand, season, geographic area, retailer pricing variations, manufacturer promotions, etc., then I would be able to easily see this 1-2% price increase.
Never any worries here. Our whole fleet runs Dexos certified M1. Cheap (less than 22.00/5 quart jug) and readily available.
Everyone needs to get over this. Corporations either make money or go out of business. Vote with your dollar...
Everyone needs to get over this. Corporations either make money or go out of business. Vote with your dollar...
Originally Posted By: CapitalTruck
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.
You and NMburb are confused. There still is a per-gallon fee! Its just a calculated fee based on market share, a close estimate of the amount of quarts of oil sold.
For clarity, please just read the article.
Especially this part of the article:
"According to industry sources familiar with Dexos, GM will calculate the flat fee by using the total passenger car motor oil market in gallons, GM’s market share percentage and the oil marketer’s market share percentage. GM uses those three numbers to calculate the potential number of gallons of an oil marketers’ PCMO – everything, not just Dexos – that could end up in GM vehicles. The automaker does this individually for each region, sources indicate, though an oil marketer has to buy a global license.
GM then charges a per-gallon fee on the resulting number, sources said."
Its just a calculation change based on how much oil (approximate) an oil maker sells. Get it?
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.
You and NMburb are confused. There still is a per-gallon fee! Its just a calculated fee based on market share, a close estimate of the amount of quarts of oil sold.
For clarity, please just read the article.
Especially this part of the article:
"According to industry sources familiar with Dexos, GM will calculate the flat fee by using the total passenger car motor oil market in gallons, GM’s market share percentage and the oil marketer’s market share percentage. GM uses those three numbers to calculate the potential number of gallons of an oil marketers’ PCMO – everything, not just Dexos – that could end up in GM vehicles. The automaker does this individually for each region, sources indicate, though an oil marketer has to buy a global license.
GM then charges a per-gallon fee on the resulting number, sources said."
Its just a calculation change based on how much oil (approximate) an oil maker sells. Get it?
Originally Posted By: skyactiv
Dexos is nothing but a money grab. I wish the big oil blenders sided with Valvoline initially.
And it hasn't affected the cost to consumer a single bit.
Who cares if GM charges a royalty. In the end the blender eats the cost because the market is so competitive.
Dexos is nothing but a money grab. I wish the big oil blenders sided with Valvoline initially.
And it hasn't affected the cost to consumer a single bit.
Who cares if GM charges a royalty. In the end the blender eats the cost because the market is so competitive.
Originally Posted By: fredfactory
Originally Posted By: CapitalTruck
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.
You and NMburb are confused. There still is a per-gallon fee! Its just a calculated fee based on market share, a close estimate of the amount of quarts of oil sold.
For clarity, please just read the article.
Especially this part of the article:
"According to industry sources familiar with Dexos, GM will calculate the flat fee by using the total passenger car motor oil market in gallons, GM’s market share percentage and the oil marketer’s market share percentage. GM uses those three numbers to calculate the potential number of gallons of an oil marketers’ PCMO – everything, not just Dexos – that could end up in GM vehicles. The automaker does this individually for each region, sources indicate, though an oil marketer has to buy a global license.
GM then charges a per-gallon fee on the resulting number, sources said."
Its just a calculation change based on how much oil (approximate) an oil maker sells. Get it?
You are correct and I apologize.
However, the article makes it seem that the resulting per-quart fee is less than the old $0.09 figure, unless each oil marketer is selling only 33,333 quarts of Dexos oil ($4,000 per-company fee quoted in the article, less the old $1,000 flat fee, divided by 0.09).
Originally Posted By: CapitalTruck
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.
You and NMburb are confused. There still is a per-gallon fee! Its just a calculated fee based on market share, a close estimate of the amount of quarts of oil sold.
For clarity, please just read the article.
Especially this part of the article:
"According to industry sources familiar with Dexos, GM will calculate the flat fee by using the total passenger car motor oil market in gallons, GM’s market share percentage and the oil marketer’s market share percentage. GM uses those three numbers to calculate the potential number of gallons of an oil marketers’ PCMO – everything, not just Dexos – that could end up in GM vehicles. The automaker does this individually for each region, sources indicate, though an oil marketer has to buy a global license.
GM then charges a per-gallon fee on the resulting number, sources said."
Its just a calculation change based on how much oil (approximate) an oil maker sells. Get it?
You are correct and I apologize.
However, the article makes it seem that the resulting per-quart fee is less than the old $0.09 figure, unless each oil marketer is selling only 33,333 quarts of Dexos oil ($4,000 per-company fee quoted in the article, less the old $1,000 flat fee, divided by 0.09).
wemay
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Dexos certified oil can be purchased for less than $18 a Jug at Walmart (hardly extortion). People complain when the Chinese buy a U.S. company or wont buy products made in Mexico or [insert country here]. Yet a U.S. company requires a spec that does not require you bend over backwards to purchase or find......and we still hear complaints.
Go figure!
Go figure!
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Originally Posted By: NMBurb02
However, the article makes it seem that the resulting per-quart fee is less than the old $0.09 figure, unless each oil marketer is selling only 33,333 quarts of Dexos oil ($4,000 per-company fee quoted in the article, less the old $1,000 flat fee, divided by 0.09).
Yep, we just don't know what the fee is. The 9 cents per quart figure was thrown about, yet the article is a full five years old, so maybe it works out to ~about that much(???). My back-of-the-envelope calculations are very rough.
The whole pay-to-play racket is wrong. Most of the dexos1 tests, above and beyond SN-GF5, are taken from ISO, ACEA, ASTM, etc., the standards organizations, which already get their money from the industry as a whole to create the tests. dexos is a tax upon a tax.
However, the article makes it seem that the resulting per-quart fee is less than the old $0.09 figure, unless each oil marketer is selling only 33,333 quarts of Dexos oil ($4,000 per-company fee quoted in the article, less the old $1,000 flat fee, divided by 0.09).
Yep, we just don't know what the fee is. The 9 cents per quart figure was thrown about, yet the article is a full five years old, so maybe it works out to ~about that much(???). My back-of-the-envelope calculations are very rough.
The whole pay-to-play racket is wrong. Most of the dexos1 tests, above and beyond SN-GF5, are taken from ISO, ACEA, ASTM, etc., the standards organizations, which already get their money from the industry as a whole to create the tests. dexos is a tax upon a tax.
Originally Posted By: Dallas69
Why did GM come up with this spec if not to make money?
Be honest please.
They did already have the 4718M spec, although that essentially required a synthetic.
Its arguably not on technical grounds dexos1 was created. They could have required ACEA A1 with the old SN-GF5 stuff and ended up in about the same place as dexos1 is now.
Why did GM come up with this spec if not to make money?
Be honest please.
They did already have the 4718M spec, although that essentially required a synthetic.
Its arguably not on technical grounds dexos1 was created. They could have required ACEA A1 with the old SN-GF5 stuff and ended up in about the same place as dexos1 is now.
It is still way less. Under the new formula the marketer is charged based on market penetration of GM vehicles in a region and the oil marketer is charged a flat fee. Under the old system the oil marketer paid 36 cents per gallon sold under the dexos license, whether it went into a GM vehicle or not. This is a major improvement.
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Originally Posted By: Clevy
Originally Posted By: skyactiv
Dexos is nothing but a money grab. I wish the big oil blenders sided with Valvoline initially.
And it hasn't affected the cost to consumer a single bit.
Who cares if GM charges a royalty. In the end the blender eats the cost because the market is so competitive.
No blender "eats the cost". Anyone with any modicum of business experience knows this. The cost is passed on. It may be spread across the entire product spectrum to soften the cost per unit, but the customer is always the one who "eats it". And considering all the major brands have hopped on the dexos wagon, the consumer might not see the cost to them, but it is there nonetheless.
Originally Posted By: skyactiv
Dexos is nothing but a money grab. I wish the big oil blenders sided with Valvoline initially.
And it hasn't affected the cost to consumer a single bit.
Who cares if GM charges a royalty. In the end the blender eats the cost because the market is so competitive.
No blender "eats the cost". Anyone with any modicum of business experience knows this. The cost is passed on. It may be spread across the entire product spectrum to soften the cost per unit, but the customer is always the one who "eats it". And considering all the major brands have hopped on the dexos wagon, the consumer might not see the cost to them, but it is there nonetheless.
There still are non-dexos1 synthetics and blends available should one so choose, such as Formula Shell Synthetic or Eneos. One can also go out of grade, if one so chooses. No one is being forced to buy dexos1. And I, too, am of the opinion that GM isn't making a bunch of money at this. Covering costs and making a paper product to please accountants is not the same as making a giant killing or running a scam.
Should I be upset that the Delvac 1 I'm using required XOM to spend a bunch of money on builder's approvals and tests that have no bearing upon my engine whatsoever? It's simple - buy something, or don't.
Should I be upset that the Delvac 1 I'm using required XOM to spend a bunch of money on builder's approvals and tests that have no bearing upon my engine whatsoever? It's simple - buy something, or don't.
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