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2 The global automatic transmissions market continues to grow steadily with production expected to reach almost 57 million by 2020 with significant growth in China. And it continues to diversify as OEM efforts to improve the fuel economy performance of their vehicles intensifies. The change from 2005 to 2020 is quite dramatic, with the once popular 3 5 speed transmissions almost disappearing from factory installations and 8, 9 and 10 speeds expected to account for the largest market share, of some 30%, as they begin to displace the 6 and 7 speeds that are popular today. In the next 5 years we can also expect to see continued growth in other transmission designs with both CVTs and DCTs accounting for most of the global production increase. However, automated manual transmissions combined with electric variable transmissions used in hybrids, and reduction transmissions used in electric vehicles, will remain only a small portion of the market. 2

3 As Khaled Zreik of GM explains, we can expect to see high regional variations in terms of transmission type. Khaled Zreik CVT is gaining more presence and high visibility in the US, and again, for a small and mid size vehicle, CVT may become dominant in the US. As far as DCT, DCT is popular in Europe where the manual transmission is the baseline. In the US, the driving quality of the DCT has not been widely accepted so far. Selection these days is based primarily on fuel economy and market capability. I would say emission is a given, driving quality is a given as well, and of course cost is always a consideration. 3

4 In their quest for improved efficiency, most OEMs are continuing to increase the number of speeds in their stepped automatic transmissions and have been making a wide range of hardware changes. And as Khaled Zreik explains, with fuel economy high on the agenda and significant fuel economy gains still to be found, this is a trend which is expected to continue. Khaled Zreik I think stepped gear automatic transmission will continue to be refined and maintain dominance for the next 10 years. The future for transmission would be more speeds, smaller packaging, and also newer materials. But I think there has to be a ceiling to how many speeds can be added until the return can no longer offset the cost or the extra complexity and weight. 4

5 These changes in hardware bring a new set of challenges for the transmission fluid. The next generation of fluids will need to deliver against all of these requirements, to provide the level of comfort and driving experience users expect, while contributing to the vehicle s efficiency and ensuring each component is sufficiently protected over the entire drain interval. 5

6 So what does a next generation ATF look like? With fuel economy a key focus for OEMs, the trend to lower viscosity continues. We have already seen the move from 6.8 to typically 5.5 centistoke fluids and with fluids of 4.5 centistokes already in use a move to even lower viscosities looks likely in the future. But its not just about viscometrics next generation fluids will also need to offer formulation flexibility, and include advanced chemistries to deliver improved gear protection, better anti foaming properties, improved oxidation, high friction control and full materials compatibility including electronic components, and all these capabilities must be delivered over much longer even so called fillfor life drain intervals. As Khaled Zreik confirms, the formulation landscape is becoming more complex, making the co engineering of the lubricant and hardware increasingly essential. Khaled Zreik I think OEMs and formulators, additive company will continue the trend of codeveloping fluid and component. I think new light weight material will challenge the existent lubricant formulation. And I also think that fluid consumption will be decreased and the fluid will need to be more robust and fill for life. Trends for lowering viscosity will continue, and architecture will be designed around the lower viscosity fluid. 6

7 In the DCT market we have also seen some innovation with the race to add more speeds apparent here too. ZF and Getrag have both added 7 Speed DCTs to their transmission line up. Manufacturers including BMW, Daimler and Volkswagen to name a few already offer models with 7 speed DCTs as an option. And we hear from Hyundai that it expects its 7 Speed DCT to deliver an improvement in fuel consumption of up to 20% compared to a conventional sixspeed automated transmission, while acceleration performance could increase by up to 10%. But Honda has gone one step further and has developed an 8 speed DCT which incorporates a torque converter to provide internal noise vibration and harshness benefits that help deliver the low speed refinement most drivers seek, what s more, its inherent torque multiplication boosts off the line acceleration. It leaves us wondering how long until the first 9 speed is announced! 7

8 The increases in the number of different types of transmissions in light duty applications means the complexity of the fluids market is also increasing. And, as the use of DEXRON, MERCON and high viscosity multi vehicle ATFs declines we are seeing an increase in the demand for low viscosity multivehicle products. These not only offer advantages in the latest fuel efficient transmissions with 6 and more speeds but also deliver added protection to older vehicles with 3, 4 and 5 speeds AND meet DEXRON / /MERCON and JASO requirements AND perform well in both high and low viscosity applications, while providing fuel economy benefits. Multivehicle fluids can offer significant advantages to those looking for a fluid to cover a range of light duty applications. They deliver the balanced frictional performance and hardware protection for the latest domestic and import transmissions and give blenders the flexibility they need to meet the requirements of all their target markets. 8

9 To summarise the transmission section in this steadily growing market, fuel economy is driving hardware change. And OEMs are adding more speeds to conventional automatic transmissions, and DCT units. The relative uptake of these hardware technologies varies from region to region and OEM to OEM which means the market is becoming increasingly diverse and complex. As we have seen, the formulation landscape is becoming even more complex, which means the co engineering of the lubricant and hardware is essential so that the right balance can be struck between fuel economy gains and friction durability. 9

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