Hidden Opportunities for All Players Behind Low Volumetric Demand for Finished Lubricants

Finding opportunities in the global finished lubricants industry is becoming increasingly challenging as volumetric demand growth in many of the leading countries has been flat as Kline’s Global Lubricants: Market Analysis and Assessment report shows. This market situation asks for an aggressive plan when all marketers must watch for the far-out signals. Savvy marketers can then decode these signals into an actionable plan to grow lubricants sales and market share for years to come.

“For example, new vehicle sales and an evolving vehicle parc in markets such as India, Indonesia, and Thailand drive volumetric PCMO demand, while a continuing shift to synthetics in the United States and Canada suppress volumetric growth, but boost revenues and opportunities for suppliers,” comments George Morvey, Industry Manager in Kline’s Energy Practice. “These trends are filled with clues about where and how to place your products, marketing strategy, and sales efforts.”

“An evolving parc in India can mean a shift from 2-wheelers to passenger vehicles, more lower viscosity grade PCMOs, such as 5Ws and 0Ws, growth in the franchised workshop channel during the warranty period, and opportunities in the independent workshop channel post warranty. Even in the 2-wheeler parc, vehicle demand is growing in the scooter segment, with OEMs targeting female and elderly owners,” observes Morvey. “Does your product portfolio and market message resonate with this class of customer? Could a fresh strategy and approach to scooter engine oil sales create a new sales channel for your brand? What impact will alternative-fueled vehicles have on demand for automotive lubricants?”

Smaller local brands and large multinationals alike must be watching for such clues in order to grow their business. In terms overall, global supplier rankings remain fairly stable in 2016. Having just successfully celebrated its first decade as the leading global supplier of finished automotive and industrial lubricants, Shell begins its journey once again in the #1 position in 2016, followed by ExxonMobil and BP.

Huibert Vigeveno, Global Commercial (including Shell Lubricants), Executive Vice President said, “Shell Lubricants is proud to mark its eleventh year and enter its second decade as the industry leader. The lubricants sector, like the rest of the world, is becoming faster, more competitive, more connected, and adapting to customer behaviors, and new technologies are essential for success. Our strategy remains focused on brand and value. However, at Shell, we continue to evolve to meet the opportunities and challenges of a fast-paced business environment while keeping a sharp focus on developing genuine alliances, developing customer-centric solutions, and innovating through research and technology.”

The global finished lubricant market demand hit an estimated 39.6 million tons in 2016. Asia-Pacific continues as the market leader with over 40% share in demand, followed by North America with an estimated 25% share. The United States remains the largest finished lubricants-consuming market, followed by China. Together, the two nations account for approximately 40% of the total finished lubricant demand.

Key insights and questions from this challenging market were brought up in the recently held webinars covering the North American, European, and Asia-Pacific markets. REQUEST your recording access.

All of these issues are addressed in Kline’s latest market study Global Lubricants: Market Analysis and Assessment, an in continuous publication since 2003. The study provides subscribers with insights into regional, country level, product type, channel, and viscosity grade demand along with a review of supplier activities and market share. The growing impact of the penetration of vehicle OEMs’ genuine product oils in the franchised workshop channel and the competitive threat to branded aftermarket suppliers is also examined.