Lubricant agent, reducing friction and wear, providing engine protection – what more do you want from a motor oil? And I am confident that Havoline oil offers even more than these facilities. Well, this oil is a product of Chevron. People worldwide know it for its excellent quality and performance. It can protect the engine from deposits, sludge, and further contamination.
Despite its quality, Havoline oil is often priced lower than its competitors. At this point, a question appears, “Why is Havoline oil so cheap?” Well, there is a possibility that several factors work behind the price of this efficient oil.
Throughout this blog, I will discuss those reasons elaboratively. Before that, I want to give you a brief idea. The logic behind Havoline oil’s affordability is the significant improvements, global supply and demand, cost of production, and market sentiment. However, I am starting from the beginning of Havoline oil.
Vibrant History of Havoline Oil
For sure, Havoline has a rich and exciting history that starts from the early 1990s. The Havemeyer Oil Company of New York first introduced this brand in 1904. As a the time moved forward, Havoline changed ownership multiple times. For instance, Texaco acquired it in 1931; later, Chevron merged with Texaco and owned it (Wikipedia).
This popular brand has undergone numerous evolutions to maintain the changing market demands. Also, it has kept pace with the advancements in engine technology. Again, I am adding some examples:
Havoline improved its technology in 1946. Then, in 1962, it introduced new products, Havoline 10W-30 and Havoline Single grade. Also, people started learning about ‘Improved Havoline & All Temperature Havoline’ in 1968. It was followed by Havoline Super-Premium All Temperature Motor Oil in 1971. Then, it had a breakthrough with the SAW 20W-50 in 1984 to maintain the market demand.
Besides the product innovations, Havoline has partnered with different sponsors, especially with motorsports. We all know about their advanced additive technology and Deposit Shield Technology for motor oils. Both technologies protect the engines for a long time (source). You can use these motor oils in new, high-mileage, turbocharged engines.
Now, there’s a turn! After acquiring ownership, Chevron has worked a lot. It continues to innovate and press boundaries in the motor oil industry.
Let me give you another example: the Havoline PRO-RS Renewable Full Synthetic Motor Oil. It is derived from feedstock that includes 25% sustainably sourced plant-based oils (source).
Overall, the history of Havoline speaks volumes about its promise to quality, innovation, and customer satisfaction. And indeed, it’s a brand that has stood the test of time. But it has adapted to the changes in the automotive industry. This historical progress is a great reason “Why is Havoline oil so cheap?”
Consumer Perception of Havoline Oil Pricing
You can find many positive reviews regarding Havoline motor oils when you surf the web. This brand has a good reputation in the automobile lubricant industry (source). The consumers have praised Havoline oils for their quality and value.
Some of them were about the reduced oil consumption in their vehicles. For instance, The Havoline full synthetic 5w-20 oil has been well-liked by customers. Overall, Havoline oils are akin in composition and quality to Chevron oils (source). So, when the result is fantastic, Chevron has offered quality oils at reduced rates.
The Production Process of Havoline Oil
How does Havoline produce oil? The answer to this question can explain why its oils are cheaper than other brands’ oils. Thus, the production process involves various stages – from sourcing raw materials to refining and quality control.
In this part, I will discuss those that help Havoline to ensure the final product meets the highest quality standards.
Sourcing of Raw Materials
Crude oil is a common raw material used to produce motor oils (source).
Chevron (as I told you already) is the parent company of Havoline. It procures high-quality crude oil from various sources worldwide. But I couldn’t find any explicit mention of the accurate source from the web. Hence, the collected crude oil is the primary raw material for Havoline motor oils (source).
There is a possibility that this company also uses renewable and recycled materials like liquefied waste plastic. It is common to many brands (source). To be more precise, you may need to do further research or get information from the manufacturer about raw material sourcing.
Refining Process
After sourcing, Chevron needs to transform the crude oil into base oil through the refining process. It forms the foundation of motor oils. Yet, Chevron employs advanced refining techniques to produce high-quality base oil. This oil is clear, stable, and free from impurities.
After getting base oil, it is blended with various additives to create Havoline motor oils. These additives boost the oil’s performance features like viscosity, oxidation stability, and detergency (source).
Quality Control Measures
You may think of using the oil after refining and adding the additives. But there’s another step left! Quality control (QC) is integral toHavoline’s production process.The Havoline QC process involves rigorous testing of raw materials, halfway products, and the final product.
Chevron uses strict quality control measures to ensure its products are defects-free. Also, QC helps to meet the product with specified quality standards. Again, I am not 100% sure about Chevron’s QC methods.
Generally, oil manufacturers or similar companies use versatile QC methods. These can be 100% inspection, Six Sigma, Total Quality Management, and Statistical Quality Control. Hence, these methods help monitor and control its products’ quality (source).
So, you can see Chevron is well-organized about producing Havoline oils. Since the brand’s reputation is consistently growing, it is a possibility that it has already found a way to minimize production cost. Compared to newer brands, this manufacturer has already found its way into winning over the market with affordable oils.
Cost-effective Manufacturing Strategies of Havoline Oils
Though I have discussed the production process, I want to explain the strategies that are associated with the process. Well, Chevron’s cost-effective manufacturing strategies are also the reasons of getting Havoline oils cheaply.
Economies of Scale
Economies of scale means cost advantages. Different corporations obtain these advantages for their size, output, or scale of operation (source). Similarly, Chevron gets benefits from economies of scale in its operations. And it’s not just a mere company, right?
As Chevron produces motor oil on a large scale, it can spread the production costs over more output units. In this way, it can reduce the cost per unit. This cost advantage allows Chevron to price its Havoline motor oil competitively.
Efficient Supply Chain Management
According to Oracle NetSuite, supply chain efficiency means making sure a company’s products get where they need to be on time. Besides, there should be no excessive expenditure. It’s also about using resources wisely to make and deliver things. Other factors include supply chain risks, inadequate mitigation strategies, and dropping production efficiency (source).
Now, this type of management is another crucial factor contributing to Havoline’s affordability.
Chevron has an extensive and well-managed supply chain. It ensures the efficient sourcing of raw materials, production, and distribution of Havoline motor oil. Also, it ensures the timely availability of oil in the market through demand management, transportation scheduling, warehouse management, and automation (source).
By optimizing its supply chain, Chevron reduces costs and improves the efficiency of Havoline motor oils.
Technological Innovations in Production
Chevron continually invests a lot in technological innovations. It helps the brand to improve the efficiency and cost-effectiveness of its production process.
The company leverages advanced technologies and automation to optimize its manufacturing processes. Through this, Chevron reduces waste and enhancesproductivity. These innovations contribute to cost savings. As a result, you can buy Havoline motor oil at a competitive price.
Market Sentiment & Traders’ Influence
According to The Balance, “Oil futures contracts are agreements to buy or sell oil at a specific date for an agreed-upon price.” These contracts are executed with a commodity exchange where the traders trade only commodities. Moreover,oil prices are influenced by three main factors: current and future supply and expected demand.
The current demand is comparatively stable for Havoline oils. So, future supply and demand is also expected. In this way, Havoline oil traders influence oil prices – reduced rates than other ordinary brands.
Final Words
So, what do you think now – “why is Havoline oil so cheap?” Let me recap the reasons for getting these oils at affordable prices.
As the mother brand, Chevron has beeninthe automotive industry for a long time. It knows how to provide the best oil at competitive prices.From sourcing the raw materials to distribution through different processes and following strategies influence the rates of its Havoline oil.
It would be better to re-read the whole content as it may initially seem complex. I hope you won’t have any problem with this.
Thanks for reading this blog!