ISRAEL LUBRICANTS MARKET SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS (2025 - 2030)

Israel Lubricants Market Trends

Growing Automotive Imports in the Country

The Israeli automotive market is experiencing significant growth in vehicle imports and registrations, driven by increasing consumer demand and the presence of experienced companies specializing in vehicle assembly and supply chain operations. According to the Israel Vehicle Importers Association, vehicle demand and registration showed substantial growth in the first quarter of 2023 compared to the same period in 2022. From January 2023 to April 2023, the sales of new light vehicles reached 124,331 units, marking an increase from 109,332 units in the same period of 2022. This growth trend is further evidenced by March 2023 sales figures of 29,381 units, compared to 27,339 units in March 2022.

The market is witnessing a notable shift in consumer preferences and vehicle segment dynamics. The demand for petrol cars in Israel has increased to comprise 58% of all new vehicles, up from 55% in the previous year. The crossover or SUV segment has maintained remarkable stability and experienced significant growth in the first quarter of 2023, capturing 65.9% of all new vehicles. This represents an increase of almost 8% compared to Q4 2022 and 15% compared to Q1 2022. Major automotive manufacturers like Mercedes-Benz Group AG and General Motors have invested in technological hubs and research centers in Israel, focusing on enhancing customer experience through features like connectivity, autonomous driving, user experience, and cybersecurity. The demand for automotive lubricants, including engine oil, is also on the rise, driven by the expanding vehicle fleet and technological advancements.

Increasing Demand from the Power Generation Sector

Israel's power generation sector is undergoing significant transformation, with a strong focus on expanding renewable energy capacity and modernizing existing infrastructure. According to the Electricity Authority's annual report of 2022, renewable energy accounted for 10.1% of total electricity consumption in Israel, with ambitious government targets set at 20% by 2025 and 40% by 2030. The current renewable energy mix is diversified, with more than half of the installed capacity generated by dual-use solar facilities, 35% from ground-based solar facilities, 5% from solar thermal energy, and 3% from wind energy. This expansion in power generation infrastructure is driving the demand for various types of lubricants used in power plants, including gear oils, hydraulic fluids, turbine oils, and greases.

The sector is witnessing significant developments in renewable energy projects. In April 2023, a major milestone was achieved with the commencement of construction on Israel's largest solar farm, the Ta'anach PV plant, which will have a capacity of 250 MW and a storage capacity of 550 MWh, scheduled to begin operations in the first half of 2024 in the Jezreel Valley. Additionally, in May 2023, the Israeli Ministry of Energy and Infrastructure announced the approval of a detailed master plan for the country's first large-scale energy storage facility. The plan encompasses four 200 MW/800 MWh storage facilities, totaling a capacity of 800 MW/3.2 GWh, to be constructed in phases based on system requirements and utilizing various storage methods. These developments are creating sustained demand for specialized industrial lubricants and industrial maintenance lubricants used in power generation equipment and machinery.

Segment Analysis: By End User

Consumer Segment in Israel Lubricants Market

The Consumer segment dominates the Israel lubricants market, accounting for approximately 51% market share in 2024. This significant market position is driven by the growing automotive sector in Israel, particularly the increasing sales of passenger vehicles. According to the Israel Vehicle Importers Association, vehicle demand and registration showed strong growth in early 2023, with sales of new light vehicles reaching 124,331 units from January to April 2023. The demand for petrol cars increased to make up 58% of all new vehicles, while the crossover/SUV segment experienced significant growth, holding 65.9% of all new vehicles in Q1 2023. The segment's dominance is further strengthened by the rising adoption of synthetic oil and semi-synthetic lubricants among private vehicle owners, who are increasingly aware of the benefits of premium lubricants in extending engine life and improving performance.

Commercial Segment in Israel Lubricants Market

The Commercial segment is projected to witness the fastest growth in the Israel lubricants market during 2024-2029. This growth is primarily driven by the expanding transportation and logistics sector, coupled with increasing investments in infrastructure development projects across Israel. The segment's growth is particularly notable in the light commercial vehicles (LCV) and heavy commercial vehicles (HCV) categories, where there is a rising demand for high-performance transmission lubricants that can withstand heavy-duty operations. The increasing adoption of advanced lubricant technologies in commercial fleets, aimed at improving fuel efficiency and reducing maintenance costs, is also contributing to this growth. Additionally, the expansion of e-commerce and last-mile delivery services is creating new opportunities for commercial vehicle lubricants, further accelerating the segment's growth trajectory.

Remaining Segments in End User Segmentation

The Industrial segment represents a significant portion of the Israel lubricants market, serving diverse applications across power generation, metallurgy, metalworking, and other industrial sectors. This segment's demand is primarily driven by the country's growing industrial base and increasing focus on manufacturing efficiency. The power generation sector, in particular, shows strong demand for specialized lubricants used in turbines, compressors, and other equipment. The metallurgy and metalworking industries also contribute significantly to the industrial lubricants consumption, particularly in applications requiring high-performance industrial greases and metalworking fluids. The segment's growth is further supported by the increasing adoption of advanced lubricant technologies that offer better wear protection and longer service life in industrial applications.

Segment Analysis: By Product Type

Engine Oils Segment in Israel Lubricants Market

Engine oils dominate the Israel lubricants market, holding approximately 54% market share in 2024. This significant market position is driven by the growing automotive sector in Israel, particularly the increasing vehicle population and sales. The segment's dominance is further strengthened by the rising demand from both passenger and commercial vehicles, with the country witnessing substantial growth in vehicle registrations. Engine oils are essential for reducing friction between engine moving parts, providing cooling effects, cleaning, corrosion protection, and ensuring smooth propeller operation. The segment's leadership is also supported by the expanding industrial sector, where engine oils are crucial for various applications including manufacturing equipment, power generation, and marine applications.

Transmission & Gear Oils Segment in Israel Lubricants Market

The transmission lubricants and gear oils segment is projected to experience the fastest growth in the Israel lubricants market, with an expected growth rate of approximately 6% during 2024-2029. This accelerated growth is primarily attributed to the increasing demand from the automotive and industrial sectors. The segment's growth is driven by the rising need for sophisticated transmission fluids that can handle modern automotive technologies, particularly in automatic transmissions and advanced gear systems. The expansion of industrial activities, especially in manufacturing and construction sectors, is further fueling the demand for high-performance gear oils. Additionally, the growing focus on fuel efficiency and the need for enhanced vehicle performance is boosting the adoption of advanced transmission fluids.

Remaining Segments in Product Type

The other significant segments in the Israel lubricants market include hydraulic fluids, greases, metalworking fluids, and other specialty products. Hydraulic fluids represent a substantial portion of the market, primarily driven by their extensive use in industrial machinery and construction equipment. The grease segment maintains steady demand due to its crucial role in various industrial applications and automotive components. Metalworking fluids, while representing a smaller share, are essential in manufacturing processes and metalworking operations. The remaining specialty products cater to specific industrial applications, including process oils, turbine oils, refrigeration oils, and transformer oils, each serving unique industrial requirements and contributing to the overall market diversity.

Segment Analysis: By Distribution Channel

B2C Segment in Israel Lubricants Market

The Business-to-Consumer (B2C) segment holds the dominant position in Israel's lubricants market, accounting for approximately 58% market share in 2024. The segment's strength comes from its extensive retail network, including fuel stations, DIY stores, and automotive service centers across Israel. Major companies like Paz Group, Sonol, Delek, and others have established a strong presence through their numerous fuel stations - with Paz operating 266 public fueling stations, Delek having 243 stations, Sonol maintaining 241 stations, and Dor-Alon managing 266 fueling stations. These retail locations serve as crucial distribution points for automotive lubricants, particularly engine oil, to individual consumers. The B2C channel primarily caters to private vehicle owners who purchase lubricants directly from fuel stations and automotive stores, with engine oil being the most commonly sold product through this channel.

B2B Segment in Israel Lubricants Market

The Business-to-Business (B2B) segment is projected to experience the fastest growth during the forecast period 2024-2029. This growth is primarily driven by increasing industrial activities, rising demand from the power generation sector, and expanding automotive fleet operations in Israel. The B2B channel has gained significant traction as domestic manufacturers increasingly produce lubricant products for industrial plants, garages, car fleets, and institutional customers. Companies like Paz Lubricants and Sonol have established sophisticated logistics centers for storing and delivering oil throughout Israel, with some facilities operating 24 hours a day to meet B2B demand. The segment's growth is further supported by the expanding defense sector, transportation industry, and marine applications, where bulk orders and long-term supply contracts are common.