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Petroleum Quality Institute of America

 
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September 10, 2010
 
JOBBERSWORLD...MARKET INTELLIGENCE FOR INTELLIGENT MARKETERS

The First and Only Independent Newsletter to Focus on Lubricant Distributors.

Your needs, your concerns, your outlook. No bias, no fluff and no punches pulled. Whether it's buy backs or brand battles, allocation of co-op ads, operating costs or turf wars, Jobbers World keeps you on top of the issues that matter to YOU: The Lubricant Marketers!

 
 
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CAM2 Will Produce and Offer dexos1

JobbersWorld has learned that CAM2 will produce and offer licensed dexos1™ product. But according to a CAM2's announcement, it does not agree with the approach taken by General Motors in the implementation of the dexos™ service category and product line. With regards to General Motor's approach, CAM2 says, "We believe this approach enacts a severe cost penalty for the users of the dexos™ products as mandated by General Motors." 

 

In the following letter to its marketers, CAM2 says:


-----------------------------------------------------------------------------------------------------------

 

CAM2 has been and remains committed to supplying its' customers with lubricating products that meet or exceed the latest specifications and are manufactured to meet the highest quality standards.

 

Therefore, in an effort to clear up some of the uncertainty that may exist in the market and with our customers, CAM2 is proud to announce that it is CAM2's intent to have a fully licensed dexos1™ product available for our customers with vehicles that require a dexos1™ product. CAM2's new dexos1™ product will be licensed with General Motors at the more stringent dexos1™ service level and with ILSAC and API at the GF-5 and SN-RC performance levels

 

While we have not yet determined the final production cost and our market price point for CAM2's dexos1™ product offering, it is clear, that as a result of the General Motors requirements to obtain a dexos™ license shown in more detail later in this document, these products will cost substantially more to license than traditional non-dexos™, API/ILSAC approved motor oils..

 

GM DEXOS™ LICENSE COST DETAILS


Any company wishing to manufacture and/or market a GM licensed dexos™ product will need to pay to General Motors:

 A) An annual licensing fee for each viscosity grade a company intends to produce and sell under its dexos™ license.

  B) A one-time sampling fee for each viscosity grade a company intends to market under its dexos™ license.

  C) A Royalty Fee calculated using each Blender's market and growth potential parameters as calculated by a third party consultant hired by GM and based on an average rate of US $0.09 per quart (liter) or $0.36 per gallon of dexos™ engine oil sales throughout the term of the license.

Jack Baker, President of CAM2 says "We do not agree with the approach being taken by General Motors in the implementation of the dexos™ service category and product line.  We believe this approach enacts a severe cost penalty for the users of the dexos™ products as mandated by General Motors.  However, to live up to our commitment to our customers that purchase General Motors vehicles, that we will supply them with premium quality products that meet or exceed all their OEM's requirements, we have decided to provide to our customers a fully licensed dexos1™ product." Mr. Baker also says, "For our many customers that do not drive General Motors vehicles and should not have to support the General Motors program, we will also offer a fully licensed GF-5/SN-RC product that does not incur General Motors dexos™ licensing fees and we expect to have this product available for our customers on the first day that these new API/ILSAC GF-5/SN-RC products can be sold."

At CAM2 we are committed to providing all of our customers with the finest products we can make that meet or exceed their needs at a fair and value added price.

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