Slide 1 PASSENGER CARS

Slide 1 PASSENGER CARS

Slide 2 High Mileage 9% Mid Tier 11% Top Tier 9% Conventional API SN/ILSAC GF-5 66% API SL and below 5%

Slide 3 Viscosity grade trend forecasts in the North American PCMO market 100 80 60 40 20 0 2000 Today 2017 Forecast 2021 Forecast SAE 0W-XX SAE 5W-20 SAE 5W-30 SAE 10W-30 SAE 10W-40 SAE 20W-50 Monogrades Other Despite slow market penetration, ultra low viscosity fluids are on the increase

Slide 4 Bob Proctor Honda R&D Americas Incorporated Manager of Cost & Environment Planning Selda Gunsel Shell President of Global Commercial Technology

Slide 5 Fiat Chrysler 13% Ford 15% General Motors 18% Other 2% Toyota 14% Subaru 3% Mazda 2% VW + Audi 4% Mercedes-Benz 2% BMW 2% Hyundai Group 8% Nissan 8% Honda 9%

Slide 6 Vehicle population continues to grow China accounts for 40% of the increase Significant growth in developing markets India, Indonesia, Brazil, Mexico Emissions limits tightening in many countries Tough fuel economy and CO 2 emissions limits OEMs must respond with hardware innovations 1.7 Billion light-duty vehicles by 2040

Slide 7 150 100 50 0 New Vehicle Sales by Type, Millions 2010 2020 2030 2040 Data source: Exxon Mobil 33% hybrids in global fleet by 2040. Given the current price of crude this forecast is likely optimistic. Gasoline Diesel Gas/LPG Full hybrid Electric/fuel cell Fuel economy drives the development of new hardware

Slide 8 Kazuo Yamamori Toyota Motor Corp., Tribology Material Dept., Material Development Division Project Manager

Millions Slide 9 5.9% growth in vehicle sales Large and luxury brands post biggest gains CAFE regulations drive hardware change Boosted gasoline gaining popularity Hybrids sales drop 8.8% 20 15 10 5 US vehicle sales New hardware drives specification changes 0 2013 2014 US OEMs Japan OEMs EU OEMs Hyundai Group Tata US new car sales pass 2007 pre-economic crisis levels

Slide 10 Ron Romano Ford Motor Company Service Lubricants Technical Expert Angela Willis General Motors Lubricants Manager

Slide 11 Ford Sequence VH Ford LSPI Ford Chain Wear Toyota Sequence IVB GM Sequence VIE GMOD * Chrysler IIIH * Will not be an ASTM standard

Slide 12 Ron Romano Ford Motor Company Service Lubricants Technical Expert Bruce Royan Infineum UK Ltd Lubricants Technology Manager Bob Proctor Honda R&D Americas Incorporated Manager of Cost & Environment Planning

Slide 13 Downsized and boosted engines exhibit irregular combustion Severe knocking Cracked piston ring lands and skirts Cylinder head damage Increase emissions Lower fuel efficiency LSPI test focus Development of test methodologies Evaluate new lubricant technologies Enable new hardware without compromising performance

Slide 14 Kazuo Yamamori Toyota Motor Corp., Tribology Material Dept., Material Development Div. Project Manager

Slide 15 June - Sept 2015: Tests ready for matrices? July 2015: Start precision matrices April 2016: ASTM test acceptance March 2017: AOAP approval of GF-6 January 1, 2018: API First License Date

Slide 16 Current dexos 1 approvals start to expire 2H 2015 A number of new tests requirements Low speed pre-ignition Aeration Vehicle Fuel economy GM oxidation (GMOD) Turbochargers Service fill by end of 2015 Factory fill in 2016 GM will use SAE 0W-20 for the majority of their new engines, replacing SAE 5W-30

Slide 17 Angela Willis General Motors Lubricants Manager Thom Smith Valvoline, A Business Unit of Ashland Incorporated Vice President of Lubricant Technology Bruce Royan Infineum UK Ltd Lubricants Technology Manager

Slide 18 CEC test development influencing release date Complete Under development Additional requirement DV6 Oil dispersion OM 646 LA Biodiesel EP6 Gasoline piston cleanliness CEC L-109 M271 EVO Bench oxidation Sludge Elastomer compatibility Sufficient time between test development and release is needed to ensure a smooth transition ACEA specifications must keep pace with engine technology TU5 succession being discussed TU3, M111FE, VW TDI and Sequence VG will need to be discussed ACEA European Oil Sequences expected in 2015 The key focus of attention for lubricant formulators in Europe is the revision to the ACEA European Oil Sequences. Timing for the next ACEA sequences is mainly being driven by the progress of CEC test developments. While some tests are ready, some of the most critical tests for the ACEA update are still under development and are proving to be difficult to complete. The good news is that CEC has already completed the DV6 oil dispersion test, which will replace the DV4 and the CEC L-109 Oxidation test, which is supposed to replace the GFC Oxidation test in the ACEA sequences. However, the OM646LA biodiesel test and the M271 EVO sludge test are still under development. In addition, new developments including the EP6 gasoline piston cleanliness and the new elastomer compatibility tests are now in progress. In our view it is essential to leave sufficient time between test development and specification release date to allow stakeholders to understand the tests, discuss limits and collect sufficient data to ensure a smooth and timely transition to the new ACEA sequences. Clearly the ACEA specifications must keep pace with advancements in engine technology and be representative of the vehicle fleet it is meant to protect. Which means that replacing tests are either coming to the end of life or which are no longer representative is an evergreen topic for ACEA. Succession options for TU5 test are already being discussed for the next ACEA sequences and for the subsequent ACEA issues the replacement of TU3, M111FE, VW TDI and the Sequence VG will all become important topics for discussion. It is imperative that ATIEL, ACEA, and ATC work collaboratively for a long term test replacement strategy to maintain the current ACEA sequences.

Slide 19 Proposed new C5 Category Driven by OEM demand for fuel economy SAE 0W-20 and SAE 5W-20 viscosity grades Engine performance requirements = ACEA C2 M111 fuel economy test 3.0% minimum Draft ACEA C5 Category HTHS 2.6 < 2.9 mpa s Shear Stability Stay in grade Noack 13% TBN Sulphur 0.3% m/m Phosphorus 0.09 0.07% m/m Sulphated Ash 0.8% m/m Chlorine Report Opportunity to reduce complexity The structure of the light-duty sequences has remained unchanged since the introduction of the ACEA C4 Category in 2007 but for the next issue we expect a new C5 mid-saps category for lower viscosity grades SAE 5 and OW-20 to be included with High Temperature High Shear as low as 2.6, which is driven by OEM requirements for improved fuel economy. While the engine performance requirements are expected to be the same as the ACEA C2 category, the M one eleven fuel economy test limit increases by another 0.5% in Fuel Economy improvement to 3%. In our view this presents a good opportunity to reassess the need for all the current categories to remain, and explore if the complexity of the sequences can be reduced. Bruce Royan, Lubricant Technology Manager at Infineum comments on the ACEA update.

Slide 20 Bruce Royan Infineum UK Ltd Lubricants Technology Manager The new ACEA sequences will bring further complexity to the European marketplace. It is important that we deliver higher levels of fuel economy through lubrication in Europe; nevertheless, the approach being taken will fragment further an already very fragmented marketplace. One of the key challenges has been the development of new engine tests that are both reproducible and repeatable and will server the purpose required within the ACEA specification.

Slide 21 Kazuo Yamamori Toyota Motor Corp., Tribology Material Dept., Material Development Division Project Manager

Slide 22 Unprecedented test development activity Aggressive timeline to meet GF-6 Intensive activity around new and revised OEM specifications