Parsippany, NJ-based research and consulting firm Kline & Company recently published the below blog about the Seven Asia-Pacific Lubricants Markets You Need to Know About.
Accounting for 44% of the global market, Asia-Pacific is the leading region for finished lubricant demand. Overall finished lubricant demand in the Asia-Pacific region is forecast for modest growth of a CAGR of 1.8% over the next five years. An emphasis on fuel economy and a modern vehicle parc will drive the use of synthetics and other lighter viscosity grade lubricants for passenger car motor oil (PCMO) in the region.
These leading Asia-Pacific country markets include China, India, Thailand, Vietnam, Malaysia, Philippines and Indonesia.
In 2014, the gap between the United States and China for being the #1 largest lubricant-consuming country market continues to shrink. Although passenger car sales growth is expected to slow down in China, penetration is still low compared with developed economies, resulting in China still offering potential for long-term growth. The commercial and industrial segments are also expected to recover slightly through 2016, as the government launches several new policies to boost the domestic economy.
Synthetic oils have grown at more than 10% annually since 2013. Mobil 1 from ExxonMobil is the best-known full synthetic product in China, says Kline.
Overall competition amongst the major lubricant suppliers has become more competitive in China in recent years, as multinational companies pay more attention to the Chinese market. While major domestic and multinational suppliers used to concentrate on different market sectors, now all include strategies to take market share from other domains.
Following China, India is the third largest country market, accounting for 6% of global lubricant demand and 13% of Asia-Pacific lubricant demand in 2014. After a period of high growth of a common developing country, India has been experiencing a slow down. Recently, marketing campaigns such as Make in India and various infrastructural changes such as the interlinking of rivers, development of 100 smart cities, and Ganga cleaning project among others, if implemented, would add to the overall growth of the economy.
Following India is Thailand. The total lubricant consumption has declined in 2014 across all three segments. The consumer segment is still the leading segment that also suffered the largest decline due to the flooding in 2011. However, Thailands lubricant demand is projected to grow at a CAGR of 2.6% by 2024 in line with the economic development and GDP projections. In the PCMO market, over the next 5 to 10 years, semi-synthetic and full synthetics will increase market share as more consumers will favor oils enabling longer drain intervals.
The next largest Asia-Pacific lubricant country market is Vietnam. The high-end luxury car segment has grown rapidly in Vietnam. In 2014, several luxury auto brands such as Rolls-Royce, Bentley, Lexus, Infiniti, and Range Rover have already set up car-dealer networks driving demand for synthetic lubricants. As many multinationals relocate production facilities to Vietnam, demand for industrial lubricants in manufacturing sector is growing. There has been a trend toward modernizing commercial vehicle fleets driven by the Vietnamese government regulation which does not allow trucks in use to exceed 25 years of age.
Following Vietnam is Malaysia. Semi-synthetics are more popular than full synthetic lubricants, accounting for about 30% of the PCMO segment. An estimated 42% of HDMO lubricants sold in Malaysia now meet the API CH-4 service category, while CF-4 accounts for about 31% of the market. There is a considerable population of older trucks and buses in Malaysia.
Next, in the Philippines' commercial segment, multigrade lubricants will experience significant growth because the government has ordered the phaseout of all public utility vehicles in use that are 13 years or older. According to the Philippine Development Plan, the government will lay an emphasis on developing infrastructure for air, sea ports, roads, agriculture, waste management, and energy source facilities. This should have a positive impact on metalworking fluids and other related industrial oils and fluids.
Finally, Indonesia (2013) MCOs are the leading product in the consumer automotive segment representing 50% of engine oil demand. Semi-synthetics are more popular than full synthetic lubricants, accounting for about 33% of total engine oil demand. Equipment replacement in the commercial segment is accelerating in Indonesia, and obsolete buses and trucks have been scrapped in the last three years. The proportion of recycled and counterfeit oils consumed in this sector has declined. In the industrial segment, there is a trend that customers increasingly start using high quality multinational products.
To read more about these vibrant markets from Kline's blog and Asia-Pacific region factsheet,
click here
