As the auto industry evolves, lubricant makers can now capitalise on this dynamic market landscape.
28 May 2024 | 7994 Views | By Colin Hodgson, Chevron International Products
With the growing number of automobiles in India, it is no surprise that automotive lubricants feature strongly in the country's dynamic marketplace. Historically, India's growth in the automotive lubricant sector has proven positive, even when demand in other countries and regions has slowed. 2024 holds significance because several factors like ...
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With the growing number of automobiles in India, it is no surprise that automotive lubricants feature strongly in the country's dynamic marketplace. Historically, India's growth in the automotive lubricant sector has proven positive, even when demand in other countries and regions has slowed. 2024 holds significance because several factors like technological advancement, sustainability, and customer preferences are converging, resulting in the reshaping of the global automotive industry.
Let's take a look into the current scenario in India for lubricants, as well as upcoming trends and potential for growth.
India is one of the biggest consumers of automotive lubricants, and its finished lubricant market is the third-largest in the world. One reason for this has been the steadily rising demand for automobiles as a result of the preference for personal vehicles over public transportation. India's automotive industry saw a 27% rise in 2021 despite global demand for vehicles significantly diminishing, especially after the Covid-19 pandemic, according to a report by Moody’s. As per a Mordor Intelligence report, the India Automotive Lubricants Market stood at 1.45 billion litres in 2021 and is projected to register a CAGR of 6.31% to reach 1.97 billion litres in 2026. In India, motorcycles accounted for 77.55% of the total number of on-road vehicles in 2020, followed by passenger vehicles and commercial vehicles, with a share of 16.84% and 5.61%, respectively.
The automotive and industrial sectors primarily drive the demand for lubricants in the country. India's lubricant market was valued at USD 5.92 billion in the year 2022 and is expected to rise with a CAGR of 8.08%. This figure indicates the steady growth and the integral role lubricants play in the nation's diverse industries, a big part of which is the automotive sector.
With higher penetration of vehicles in both rural and urban areas, the demand for lubricants is poised for robust growth in all sectors, more so in the automotive. Another promising sign for lubricant demand is the increased availability and adoption of used automobiles in the market. According to a Mordor Intelligence report, the current valuation of used cars in India is USD 31.62 billion and is anticipated to grow to 63.87 billion in 2029. The average holding time of a new vehicle has reduced considerably from six to three years. All luxury automakers have their own pre-owned car businesses, which is a good indicator of a thriving used car market.
Technology continues to advance at great pace in the lubricant sector through advanced lubricant formulations to meet advanced application needs. These are designed to offer much better characteristics such as improved wear protection, oxidation stability and shear stability across varied applications and environments. Compatibility with exhaust after treatment devices is also an important factor. In the automotive industry, where operational efficiency and engine longevity are essential, these characteristics serve as compelling selling points in the market.
With increasing disposable income and the growing number of high-performance automobiles in the country, the demand for high quality and top performance lubricants is on the rise. There is a higher sense of expectation for lubricants from the public owing to the needs of the latest advanced engines in these modern cars. The shift towards superior engine protection and better efficiency requires advanced performance lubricants.
Due to heightened environmental awareness, businesses and consumers are showing a growing preference for environmentally friendly lubricants. The push towards more sustainable solutions in all spheres of business has led to more innovation in the lubricant sector. Long Drain and Extra Long Drain engine oils especially in the commercial sector have started to gain traction with end users who recognise the value and savings contributions of these oils to their operations.
India stands at the forefront of the global auto lubricant market, with a prediction of consistent growth driven by several factors. Even in the face of the Covid-19 pandemic, the consistent demand for lubricants highlights the market's resilience. With its rapidly developing economy, better infrastructure, and the widespread adoption of automobiles, it is clear that India is a key market in the global lubricant industry space and shows strong signs of increasing importance in the years to come.
Colin Hodgson is the Technical Support Manager, IMEA, Chevron International Products. Views expressed are of the author.