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The global automotive engine oil market Size was valued at USD 36.49 billion in 2018 and is projected to reach USD 45.66 billion by 2026, exhibiting a CAGR of 2.88% during the forecast period.
Automotive engine oil, also known as motor oil is a lubricant used in the internal combustion engine to provide power to motorcycles, cars, and many other types of automotive engines. The main function of engine oil is to reduce the wear and friction on the moving parts and also to clean the engine from sludge and varnish. Automotive engine oil also neutralizes acids that originate from the fuel due to the oxidation of the lubricants and improves the sealing of the piston rings. This also serves as an insulator and cools the engine parts by carrying heat away from the moving parts. The quality of engine oil is defined by the engine type. Diesel and petrol engines have some general requirements concerning engine oil in common and have their critical areas of application.
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Trend of the New Entrants to Join the Engine Oil Business
The motor oil is a highly profitable business for the downstream and is providing many opportunities for the players to expand their businesses. It also provides the new entrants to join their business. For instance, Marathon Petroleum Corporation and Andeavor Logistics signed a definitive merger agreement, under which the former will acquire the latter for USD 23 billion. The transaction is expected to create a diversified midstream company and would also expand Marathon Petroleum’s position in the Marcellus shale and Permian basin. This will also enable the company to deploy funds in the high-growth projects.
Growth in Demand for High Mileage Vehicle is Driving the Progression of Automotive Engine Oil Market
The engine works properly when it is lubricated. It needs to put less work to the moving piston so that the piston glides easily. Engine oil is used so that the vehicle should operate using less fuel and also would run at a lower temperature. The increasing demand for lower viscosity motor oil is driven by its ability to improve the fuel economy along with the OEMs recommending these oils to maximize performance and converting their factory and service fill requirement to low viscosity grade products. Moreover, engine and bolt-on hardware technologies such as gasoline and turbochargers evolve to reduce emission and improve fuel economy. It also plays a very important role in increasing the demand for motor oil.
Increase in Demand for Synthetic Automotive Engine Oil Products to Driving Growth
Synthetic automotive engine oil is considered as a replacement for mineral based engine oil. Synthetic engine oils are fabricated by the polymerization of short chain hydrocarbon molecules know as alpha-olefins into long chain hydrocarbon polymer called as polyalpha-olefins. They are chemically similar to mineral oils refined from crude oils and thus, have high demand from the developed regions such as North America and Europe. The advantage of synthetic engine oil is that it improves fuel economy, decreases oil consumption, and also extends oil change intervals. Furthermore, synthetic motor oils are more resistant to temperature change, less volatile than mineral engine oil, and are not likely to oxidize. Thus, the demand for synthetic motor oil is expected to increase in the forecast period.
Volatility of Raw Material is Expected to Hamper Growth
The market of automotive engine oil is facing numerous challenges due to the volatile change in the prices, over usage or product shortage, currency fluctuation, continuous emphasis on energy efficient products, and environmental regulations. There has been an increase in the number of competitors and it has raised sustainability issues for the companies to strive in the high risk and high return in business. The cost of production is high as it involves complex processes to drive out the finished products. The cost poses severe challenges from the customers as they demand a reasonably priced product. It thus makes the customers difficult to buy the product.
Mineral Based Automotive Engine Oil Holds the Largest Share in the Market
Based on grade, the global automotive engine oil market is classified into mineral, synthetic, and semi-synthetic automotive engine oil. The mineral engine oil segment holds the largest share in the global motor oil market as compared to the synthetic and semi-synthetic oil segments. Mineral oil is directly derived from refined crude petroleum oil and is created as a part of the oil refining process. Mineral oils are mostly used in cars as they are less expensive and are easily available. Moreover, mineral-based automotive engine oils are the most basic type of oil and are most commonly used for the majority of everyday vehicles. They are more suitable for the two-wheelers where the conditions are not extremely hot or cold.
The demand for semi-synthetic engine oil is expected to increase over the period as they are not costlier like synthetic oils. Semi-synthetic oils are the blend of mineral oil containing a small amount of mineral oil.
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Diesel Segment to Account for the Major Share during the Forecast Period
In terms of engine type, the market is segmented into diesel, petrol, and alternative fuels. The demand for diesel engine is slightly higher than that of the petrol engine segment. The vehicles running on diesel are higher than the vehicles running on petrol and the major reason behind it is that the price associated with diesel is less. Diesel engines are 40% more efficient than petrol engines as diesel contains more energy than petrol. The combustion process is more efficient and also lowers the CO2 emission. As the refineries covert diesel fuel into petrol fuel, the diesel fuel is cheaper than petrol as the processing cost is saved. Moreover, diesel engine oils have more anti-wear resistance and the catalytic converter in diesel is designed to deal with the corrosion-related issues, while the petrol engine is not.
Moreover, the demand for alternative fuels is increasing due to the various regulations imposed on the petrol and diesel engine because of the pollution caused by their usage.
Passenger Vehicles Segment to Maintain Strong Growth during the Forecast Period
Based on the application area, the market is segmented into passenger vehicles, LCV, HCV, two-wheelers and others. The passenger vehicles segment holds the largest market share for the automotive engine oil. Rapid urbanization and rising incomes of people, especially from the consumer class are expected to drive the market of passenger vehicles. Moreover, the demand for SUVs has surged in recent times due to the increasing leisure and tour activities globally. Owing cars and passenger vehicles are observed to be the signs of social status in most of the developing countries such as India, Brazil, Thailand, and many more. Thus, the demand for motor oil is high in these countries.
Furthermore, HCVs require more engine oil as the automotive components present in these vehicles are more and thus, they are prone to friction. HCVs carry heavy loads and thus, they need automotive engine oil at regular intervals of time to maintain the efficiency of the vehicle.
Asia Pacific Automotive Engine Oil Market Size, 2018 (USD Million)
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The automotive engine oil market size in Asia Pacific stood at USD 12416.2 million in 2018. Asia Pacific is the largest and the fastest-growing region in the motor oil market owing to the highest number of vehicles present in this region especially in countries like China, India, and Thailand. Moreover, India and China are expected to have the highest number of vehicles on road and also India has the largest market for two-wheelers, which shall further drive the growth of the market of automotive engine oil. The market in North America is characterized by substantial government support on energy-saving automotive engine oil. Furthermore, considerable awareness among the people in this region is expected to keep the market up and moving for synthetic engine oil. The market in Europe is to be governed by the usage of this oil which is environment-friendly.
The market in Latin America and the Middle East & Africa is in a nascent stage, thus it is expected to gain market share during the forecast period. Therefore, the automotive engine oil market in these regions will show more attractive growth during the forecast period.
Key Players are Following Merger and Acquisition Strategies to Maintain Their Dominance in the Automotive Engine Oil Market
The competitive landscape of the market of automotive engine oil depicts a consolidated market with the top 10 companies accounting for about 50% of the global market revenue. Key players in the market have invested a considerable amount of resources in the research and development of several motor oil products. A diversified product portfolio, supported by superior operational efficiency, and safe & novel technology development for engine oil application, are the strategies used by the market leaders for their growth.
Furthermore, small and medium-scale companies have adopted the strategy of mergers and partnerships with larger enterprises to improve their offering portfolio and other related services. This trend is projected to positively impact the global market during the forecast period as the smaller companies can gain a lot from the experience of the market leaders.
The automotive engine oil market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, grade, engine types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
An Infographic Representation of Automotive Engine Oil Market
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Value (USD Billion) and Volume (Kilo Tons)
By Engine Type
By Application Area
Fortune Business Insights says that the global market size was USD 36.49 billion in 2018 and is projected to reach USD 45.66 billion by 2026.
In 2018, the market value stood at USD 36.49 billion.
Growing at a CAGR of 2.88%, the market will exhibit steady growth in the forecast period (2019-2026).
Passenger vehicles segment is expected to be the leading segment in this market during the forecast period.
An increase in the demand for high mileage vehicle is driving the tmarket.
Asia Pacific held the highest market share in 2018.
Development of synthetic automotive engine oil, further supported by governmental support shall be a few factors supporting the adoption of motor oil
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