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Coalition to challenge Dexos

A coalition including ILMA, lubes brand Valvoline and the US Automotive Oil Change Association (AOCA) is set to challenge the GM Dexos1™ lubes standard.

Dexos 1 logoThe group has requested an investigation by the US Federal Trade Commission into the Dexos specifications, claiming anti-competitive practice.  The premise of the claim is based on the way the Dexos licencing process functions.

According to the coalition, the licencing and royalty programme allegedly creates competitive distortions because of the way per-gallon royalty calculations are made.  The group also claims that GM is creating anti-competitive practice by effectively subsiding is dealer network by offering discounts and rebates on Dexos licenced products to a point where the dealers' net costs are below the product production costs of ILMA members.

The AOCA claims its members are fielding an increase in complaints from 2011 GM vehicle owners who believe their warranties will be invalidated if they do not use Dexos1 labelled products.  The increase in cost for oil changes is, according to AOCA, being blamed by owners on the quick lube industry.

The issue is the subject of debate across the internet, with a number of forums and blogs highlighting a recent FTC consumer alert which reiterates that the Magnuson-Moss Warranty Act prohibits automobile manufacturers and dealers from denying warranty coverage based on use of an aftermarket product, unless they can show the product caused the damage or was installed incorrectly.

The coalition, which also includes the Automotive Aftermarket Industry Association, Service Station Dealers of America and Allied Trades, and the Tire Industry Association, has also had a number of meetings with US Senate and Congress representatives regarding the matter.

 

Tags: AOCA, Dexos, Environment and Regulatory watch, ILMA, North America, Valvoline

Published 18th March, 2011

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