Automotive Lubricants Market Size, Share & COVID-19 Impact Analysis, By Oil Type (Synthetic, Semi-synthetic, and Conventional), By Product Type (Engine Oil, Gear Oil, Transmission Fluids, Coolant, and Brake Fluid & Greases), and Regional Forecast, (2022-2029)

The global automotive lubricants market size was valued at USD 66.87 billion in 2021. The market is projected to grow from USD 68.63 billion in 2022 to USD 76.61 billion in 2029, exhibiting a CAGR of 1.6% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with automotive lubricants experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a growth of 14.8% in 2020 as compared to 2019.

Automotive lubricants have a crucial role in efficiently operating and protecting a vehicle. They are derived using varied sources or base oils. Mineral-based lubricants are mainly used around the globe owing to their easy availability. However, the adoption and popularity of synthetic or bio-based lubricants have rapidly increased and revolutionized the market. Technological innovations have benefited consumers in many aspects, including extended oil drain and service intervals, better fuel efficiency, and a more extended protection period.      

COVID-19 IMPACT

Disruptions in Automotive Industry Due to Spread of COVID-19 Resulted in Market Decline

Since the coronavirus outbreak in late 2019, many countries have imposed restrictions on material distribution and transportation, affecting the value chain of automotive lubricant manufacturers. During the first half of 2020, these producers faced a supply shortage due to trade restrictions in key industrial nations such as China and India. As a result of this issue, companies manufacturing capacities were hampered and demand for automotive lubricants decreased.

According to the International Organization of Motor Vehicle Manufacturers, there was a collectively 16% drop in world auto production. Further, with the adoption of the work-from-home policy, most of the owners rarely used their cars or bikes, which aided in a decline in product consumption. However, on account of business continuity plans adopted by leading lubricant suppliers backed by government initiatives to recover the economy, the market is expected to recover slowly in the coming years.

LATEST TRENDS

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Adoption of Synthetic Lubricants to Create Growth Opportunities for the Market

Synthetic lubricants are mineral oils that have undergone extensive treatments to improve their performance characteristics and meet the demand for modern automobile technologies. This segment also includes bio-lubricants that are degradable and environment-friendly. Synthetic lubricants were once considered to be premium products and had limited adoption. But, as environmental concerns and engine technologies evolve, synthetic lubricating solutions are taking pace. These products offer longer oil drain intervals than their counterpart mineral lubricants, serving the consumer demand. Moreover, other benefits of synthetic lubricating oils include improved fuel efficiency, enhanced hardware compatibility, and lower vehicle emissions. These factors surge the adoption of synthetic lubricants, creating growth opportunities for the market.

DRIVING FACTORS

Need to Protect Automotive Components and Systems is Surging the Product Demand

The characteristics of automotive lubricants, such as durability and vehicle protection, surge their adoption in the market. They offer protection against wear and tear of the components and systems of a vehicle by significantly reducing friction between the parts. Further, the use of smaller and more complex automotive systems in the industry is continuously increasing the necessity for low viscosity and better-performing lubricating oils. This is expected to support the innovation and development of high-quality lubricating oils in the coming years.

Moreover, growing high-performance requirements in vehicles are also fueling product adoption. Automotive lubricants play a pivotal role in ensuring the efficient performance of consumer and industrial vehicles in diversified and extreme environmental conditions. For instance, tractor engine oils not only protect and provide high performance of tractor in severe climate and field conditions but also facilitate better hardware compatibility of unwavering toughness and quality. They are formulated to support the proper functioning of a vehicle engine and system over-temperature ranging from -40°C to 250°C. The superior characteristics and benefits will flourish the automotive lubricants market growth during the forecast timeline.

RESTRAINING FACTORS

Innovation in Vehicle Technologies is Decreasing the Product Consumption

Automotive lubricants significantly boost the lifespan of a vehicle by reducing friction between the solid moving parts and protecting them. But, as the lubricants and technologies improve daily, the growth decreases considerably. The rising footprint of synthetic lubricants due to benefits, including better fuel efficiency has extended the oil drain intervals in vehicles from once in 6-12 months to 18-24 months. Furthermore, consumers prefer high-quality lubricating solutions with extended oil drain intervals to protect their cars. However, this has confined the market expansion in volume and is expected to result in low volume growth over the forecast period. Further, increasing sales of electric vehicles are expected to challenge the market growth in the coming years as these vehicles do not use engine oil.       

SEGMENTATION

By Oil Type Analysis

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Conventional Segment to Hold Largest Share in the Market Due to its Beneficial Characteristics

Based on oil type, the market is categorized as synthetic, semi-synthetic, and conventional.

Conventional segment accounted for the largest automotive lubricants market share in 2021. This oil is also referred to as regular or mineral oil derived directly from crude oil. Its temperature-resistant properties and stability enable its adoption in engine oil for lubrication and more excellent engine protection. Furthermore, it can be formulated in various quality levels and viscosity grades. It is mainly recommended for drivers with regular driving styles and simple engine designs.

Synthetic oils are generally composed of base oil, thickeners, and additives. They are known for their better temperature performance, ability to improve fuel economy, extend drain intervals, reduce friction, and provide considerable growth in engine power. Increasing awareness about alternative solutions for mineral oil-related goods surges the demand for synthetic and bio-lubricants from automotive manufacturers. On the other hand, semi-synthetic oils are a blend of synthetic & mineral oils. They are mixed with synthetic oils without increasing the cost to boost engine performance. Additionally, these semi-synthetic oils offer better performance at lower temperatures, which is set to fuel its demand in automotive applications.

By Product Type Analysis

Engine Oil Segment is the Largest Product Type Owing to Higher Demand from Automotive Manufacturers

Based on product type, the market is segmented as engine oil, gear oil, transmission fluids, coolant, brake fluid & greases, and others.

Engine oil plays a crucial role in the proper functioning of the engine in an automobile. It helps in the appropriate functioning of moving parts and also keeps the engine cool. Hence, frequent changing of engine oil is necessary to improve the engine’s lifespan and avoid the buildup of sludge and contaminants. Thus, there is high adoption of engine oil compared to other products. This segment is expected to continue its dominance over the forecast period due to the high number of gasoline and diesel engine vehicles on the road. Moreover, commercial and high-duty vehicles, such as tractors, trucks, and other similar automobiles, are less likely to get replaced by alternate vehicle technologies, such as e-mobility, that will ensure healthy growth of the engine oil segment in the market. 

The rising adoption of gear oil for transmissions, differentials, and transfer cases in trucks, automobiles, and other automobile machinery will fuel the growth of the gear oils segment. Moreover, rising awareness among consumers to change the transmission fluid after 30,000 to 60,000 miles to avoid noise, burning smell, transmission leaks, slipping gears, slow gear engagement, and poor vehicle acceleration will boost the transmission fluid segment growth. Brake greases are used in hydraulic clutches and braking systems of modern cars. Brake fluids are generally synthetic-based and are heavy-duty brake fluids exclusively developed for hydraulic clutches and brakes of all types of vehicles. The growth of this segment is associated with the ability of brake greases to provide long-lasting protection and temperature resistant properties.

REGIONAL INSIGHTS

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The automotive lubricants market size in Asia Pacific stood at USD 27.36 billion in 2021. Asia Pacific leads the global market on the back of the high fleet of on-road vehicles in countries such as China, Japan, India, and South Korea. The consumption pattern of various automotive lubricants changes from country to country and region to region. For instance, synthetic lubricant consumption is high in South Korea compared to India, and most of it is consumed in commercial and passenger vehicles. Whereas in India, commercial vehicles consume a high proportion of lubricating oils, followed by the two-wheeler segment, which accounts for around one-fourth of the total demand.

The demand for synthetic automotive lubricants is rapidly expanding in Europe due to increased consumer need for high-quality and efficient lubricating oils. The knock-on effect of disruption caused by the increasing demand for electric vehicles and the implementation of stringent environmental regulations in the automotive industry have suppressed market growth in the region.

North America is also expected to follow a similar trend as Europe. Rising product consumption in commercial vehicles will drive the market in North America.

Brazil and Mexico dominate the Latin America market, accounting for over two-thirds of the revenue in the market. The region is recovering from an economic slowdown and has been exposed to multiple political crises. This is expected to hamper the market growth over the foreseeable period. However, the rising investments from automobile producers in the region and growing consumer preference for personal cars will surge the product demand.

The Middle East & Africa accounts for only a single-digit share of the global market. GCC countries, Turkey and Iran, dominate the demand in the region. The conventional or mineral oil segment dominates the region with over three-fourth of the market share due to low prices of base stock and low adoption & consumer awareness in the region. The political and economic crises in the region are likely to restrict market growth over the forecast period.

KEY INDUSTRY PLAYERS

Business Expansion in the Automotive Industry to Support Growth of the Key Market Players

The market is dominated by a few major base oil manufacturers and formulators such as Royal Dutch Shell, ExxonMobil, BP, and others. All the major players operate in multiple lubricant markets (such as industrial, metalworking fluids, and automotive) and have a diversified product portfolio to fulfill the needs of various customers. Royal Dutch Shell has a high base oil production & formulation capacity, strong global presence, and distribution network compared to the rivals that make it a market leader.

LIST OF KEY COMPANIES PROFILED:

• Shell plc (U.K.)


• Exxon Mobil Corporation (U.S.)


• BP plc (U.K.)


• Chevron Corporation (U.S.)


• TotalEnergies SE (France)


• China National Petroleum Corporation (China)


• Idemitsu Kosan (Japan)


• Sinopec Group (China)


• Fuchs Petrolub SE (Germany)


• Valvoline Inc. (U.S.)


• ENEOS Corporation (Japan)

KEY INDUSTRY DEVELOPMENTS:

• July 2022: Shell USA, Inc. and Shell Midstream Partners, L.P. announced the execution of a definitive agreement and plan of merger. Shell USA will acquire all the common units representing limited partner interests in SHLX or a total value of approximately USD 1.96 billion. The transaction is expected to be closed by the 4th quarter of 2022.


• July 2021: Valvoline All-Terrain is a new engine oil designed specifically for off-highway, heavy-duty diesel engines that operate in challenging environments. It was created for wear protection in equipment operating in severe settings such as construction, mining, and agriculture.


• April 2021: Valvoline Inc. introduced Valvoline High Mileage 150k with MaxLife Plus Technology Synthetic Blend, the engine oil explicitly formulated for engines with more than 150,000 miles. The product's innovative formula lowers oil consumption in older, high-mileage engines while its Moly Additive Protection increases engine performance and power.


• March 2021: Nissan Motor India signed an agreement with ExxonMobil Lubricants to supply lubricating solutions for the passenger vehicle aftermarket. It will provide a variety of engine oils not only for BS6-compliant vehicles but also for BS3 and BS4 models from the automaker.


• February 2021: Shell stated that it will offer consumers carbon-neutral lubricants for heavy-duty diesel engines, passenger automobiles, and industrial uses. Shell Lubricants' multi-year plan will assist customers in managing their sustainability needs. Shell aims to lower the carbon intensity of its products by reducing, preventing, and offsetting emissions. 

REPORT COVERAGE

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The global automotive lubricants market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, oil types, and product types. Also, it provides quantitative data in terms of volume and value, market analysis, research methodology for market data, and insights into market trends. It highlights vital industry developments and the competitive landscape. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation