Market Trends of United Arab Emirates Lubricants Industry
This section covers the major market trends shaping the UAE Lubricants Market according to our research experts:
Increasing Construction Activities
- The construction sector in the country has been expanding at a significant rate over the past few years. The trend is expected to continue during the forecast period, primarily due to the increasing number of initiatives taken by the government to develop infrastructure and construction and the improving investor confidence in the country's economy.
- There are several ongoing construction projects in the country. The government announced 33 new developments in Dubai, Abu Dhabi, and the Northern Emirates. For instance, launched in October 2022, the Al Quoz Creative Zone Project in Dubai aims to provide housing for more than 8,000 people.
- The newly developed Dubai Urban Tech District district is located on the Creekside of Al Jaddaf district in Dubai and intends to cover 140,000 square meters of built-up area.
- Furthermore, in Dubai, the Riviera-style project called AlJurf is also under construction and stretches 1.6 km along the Arabian Gulf coast between Abu Dhabi and Dubai. The first phase of the project includes the construction of 293 small villas which are expected to be completed by mid 2023. The overall project includes the construction of a private school, shops, restaurants, boutique hotels, parks, heritage sites and among others.
- Real estate construction is booming significantly in the country. In October 2022, 18 new projects were registered with the Department of Municipalities and Transport (DMT) in Abu Dhabi's online real estate services platform, "DARI."
Expanding Automotive Sector
- Automotive and other transportation media, such as aircraft and marine, are the largest markets for lubricants. Engine designs are continually improved to enhance performance, increase efficiency, and meet environmental emission regulations.
- Light-duty vehicles include two-wheelers and passenger cars. Engine oils, gear oils, transmission oils, greases, and compressor oils are the most widely used lubricants in the automotive sector.
- Some major functions offered by engine oils are resistance against corrosion and wear and tear to ensure increased engine life and better performance; reduction of friction; increase in engine performance; reduction of fuel consumption; removal of impurities and achieving engine cleanliness; optimizing engine efficiency; and preventing energy loss by providing optimum cooling.
- Due to the persistence of very high temperatures in the United Arab Emirates, thicker engine oils are widely used. The usage of thin oils leads to the quick exhaustion of oils and engine damage.
- The country's aerospace and marine segments contribute majorly to the demand for engine oil. In December 2022, Abu Dhabi Ship Building started the production of new vessels for navy. It includes the manufacture of Falaj Class vessels for UAE Navy, which is likely to increase the demand for lubricants in the country.
- Furthermore, the country's aerospace is also expanding significantly, thus positively impacting the market for lubriants in the UAE. In July 2022, Strata- a major aircraft manufacturer in the Abu Dhabi received new business from Swiss plane maker Pilatus. Strata aims to add six more production lines for aerospace sector-related manufacturing.
- Moreover, the Abu Dhabi government has announced a USD 2.72 billion investment across six industrial programs to more than double the size of the UAE's aircraft manufacturing industry to USD 46.83 billion over the next eight years.
- Additionally, the country witnessed an increase in the sales of passenger cars. For example, more than 150,000 vehicles were sold in the first half of 2022.