Market Trends of Automotive Lubricants Industry
Increasing Usage of Engine Oils
- Engine oils are widely used for lubricating internal combustion engines in different types of automobiles. It is used for various applications such as wear reduction, corrosion protection, and ensuring the smooth operation of the engine internals.
- The oils create a thin film between the moving parts to enhance heat transfer and reduce tension during contact.
- The automobile manufacturing industry in Germany is a prominent shareholder of the overall automotive production in the European region. The country hosts major car-making brands, including Volkswagen, Mercedes-Benz, Audi, BMW, Porsche, etc. The consistent investments in R & D activities and the increasing automotive production in the country are likely to support the lubricants market growth.
- Even though general car sales in the country declined, electric vehicle registrations grew tremendously over the past few years. This growth is supported by the government's push toward all-electric cars by 2040.
- As of March 2022, Volkswagen approved an investment in a new electric car plant. The new German factory construction, which would be built next to the group's historic home in Wolfsburg, would begin in 2023, with production set to begin in 2026.
- According to data published by OICA, global automobile production increased from 80,205,102 in 2021 to 85,016,728 in 2022, boosting engine oil demand.
- All the factors above are expected to propel the market's growth studied.
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Asia-Pacific is Expected to Dominate the Market
- Rapid industrialization in the Asia-Pacific region is expected to drive market growth. The growth of industries such as automotive in the region will result in lubricant growth.
- Also, the automotive industry consumes lubricants in automotive parts for finishes which are anticipated to boost the market's growth. Asia-Pacific is anticipated to hold a major market share, with the largest consumption coming from developing and emerging countries such as China, Malaysia, India, Thailand, Indonesia, and Sri Lanka.
- According to OICA, automotive production in the region reached 50,020,793 units in 2022, increasing by 7% from 46,768,800 units produced in 2021. China was the largest producer in 2022, followed by Japan, India, and South Korea.
- Furthermore, in the first nine months of 2022, Indian passenger car sales remained strong due to savings, lower interest rates, and an increasing preference for personal mobility, which convinced customers to buy new cars. As a result, new car registrations in India grew by around 20.2% in the first three quarters of 2022 to reach 2.8 million units. Also, Government reforms such as "Aatma Nirbhar Bharat" and "Make in India" programs supported the automotive industry in the country.
- Further, the automobile industry in India is witnessing switching trends as the consumer inclination toward battery-operated vehicles is on the higher side.
- Moreover, the government of China estimates a 20% penetration rate of electric vehicle production by 2025. It is reflected in the electric vehicle sales trend in the country, which went record-breaking high in 2022. As per the China Passenger Car Association, the country sold 5.67 million EVs and plug-ins in 2022, almost double the sales figures achieved in 2021. The market is anticipated to increase the demand for automotive lubricants in the country, poised to continue sales at this momentum.
- The factors above and supportive government regulations are contributing to the increased demand for lubricants in the region.
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