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The global lubricants market size was valued at USD 117.78 billion in 2021. The market is projected to grow from USD 119.99 billion in 2022 to USD 139.12 billion by 2029, exhibiting a CAGR of 2.1% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with lubes experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global lubricants market share exhibited a decline of 8.08% in 2020 as compared to 2019.
Lubricants are fluids, oils, or greases that reduce friction between two surfaces when they are in close proximity. These fluids are crucial in automotive and industrial applications because they reduce friction between the moving elements. They're also utilized to prevent corrosion, oxidation, and thermal stability, in industrial parts. The growing competition among prominent industry leaders has aided market expansion over time. To stay ahead of the competition, major manufacturers are heavily investing in the worldwide market.
Shell, for example, expanded its portfolio in October 2020 to provide end-to-end lubrication goods and services to enterprises across a wide range of sectors, ensuring that equipment functions smoothly.
COVID-19 Impact: Production Halts in Industrial & Declined Automotive Sales to Confine Market Growth
Extensive lockdown in critical manufacturing areas such as metalworking, fabrication, oil & gas, chemicals, and consumer products throughout all regions during the COVID-19 pandemic resulted in a short-term output halt. As a result, demand for lubricating oils in the industrial sector dropped dramatically. However, once the lockdown was gradually lifted, the industrial sector was able to resume partial operations. Due to the ongoing epidemic, the industrial sector will take longer to reach full capacity. This reduced lubricant consumption even more. Furthermore, COVID-19 had a significant impact on worldwide automotive production. According to the International Organization of Motor Vehicle Manufacturers, global vehicle manufacturing dropped by 16 percent. Furthermore, because most of the owners worked from home, they rarely utilized their cars or bikes, significantly reducing consumption. As the vehicle sector consumes the most lubricating oils, decreased sales and usage of vehicles slowed the market's growth.
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Rising Demand for the Synthetic Lubricants to Aid Market Growth
The global market for synthetic lubes for large-scale enterprises has grown as a result of greater awareness about alternatives for mineral oil-related items. The rising automotive sector and industrial growth are expected to drive synthetic lubricant demand during the forecast period. Synthetic varieties have grown in popularity as a result of their better efficiency over natural mineral oils, and have progressively begun to replace natural mineral oils as the preferred lubricant for various industries that demand high levels of consistency. Polyalphaolefin is by far the most prevalent synthetic base oil used in industrial and automotive applications. As a result of their intrinsic physical and chemical features, they have lower volatility, a higher viscosity index, a lower pour point, and enhanced oxidative/thermal stability.
Increasing Demand for Better Lubrication from Industrial Sector to Drive Market Growth
With the increasing energy cost for powering industrial activities, the industrial sector is making efforts to cut energy consumption as well as operational costs. Engine parts that aren't lubricated are more prone to friction, which means they use more fuel, resulting in pollution and emissions. A good grade lubricant helps achieve the same by reducing friction between parts and enhancing machine efficiency.
According to independent testing conducted by 'The National Lubricating Grease Institute,' gears that are lubricated with synthetic lubes have less friction due to their superior density, viscosity, and molecular weight. Also, because of lower churning losses at lower temperatures and less gear erosion, PAG & PAO-based gear lubricants help in the reduction of maintenance costs in cylindrical gears.
Because of the greater cost of energy, even a little reduction in energy consumption can result in large financial savings. The potential for energy savings varies depending on the type of machine in use. It is possible to raise a company's overall earnings by significantly improving the lubrication. Rapid industrialization and stringent environmental restrictions placed on manufacturing businesses are expected to propel the global lubricants market growth.
Increasing Adoption of Electric Vehicles to Confine Market Growth
The automotive industry contributes significantly to lubricant consumption and growth in the worldwide lubricant business. Various oils are used in traditional automobiles to maintain engine quality over time. However, as the demand for crude oil grows, so do environmental concerns. Consumers in both developed and emerging countries are becoming more interested in electric vehicles. Furthermore, as technology advances, the benefits of electric vehicles become more apparent. Electric car adoption is expected to slow the growth of the automobile industry. According to the International Energy Agency, China accounted for 45 percent of all electric vehicles in 2018, up from 39 percent in 2017. It is the world’s largest and fastest-growing electric car market, as well as a global hub for electronic and electrical component manufacture. Leading electric vehicle manufacturers, such as Tesla, are investing in the Chinese market in order to take advantage of the sector's potential. Electric vehicles are also becoming increasingly popular in industrialized countries such as the U.S., Japan, and Western Europe.
High demand from Automotive Segment to Generate Highest Revenue
On the basis of type, the market is categorized into automotive oils, industrial oils, marine oils, and process oils. The industrial oils segment is further sub-categorized into Hydraulic Oils, Industrial Gear Oils, Metal Working Fluids, Greases, And Others. The automotive segment is expected to hold the largest lubricant market share owing to the escalating demand from the automotive sector. Economic growth in the developing countries is further increasing the ownership of vehicles, which will spur the demand. However, the overall segment is expected to showcase a steady in developed countries such as the U.S. and Japan. Due to rapid industrialization in the developing countries, the industrial segment holds a significant share in the global market. Industrial oils are used in a variety of equipment to improve the performance level of the components. They are mostly used in gear, compressors, turbines, and other processing equipment.
Lower Cost of Mineral Grade Products to Exhibit Growth
Mineral grade is the most often used product since it is less expensive than synthetic and semi-synthetic alternatives. Furthermore, they are made from crude oil and are manufactured in vast numbers for usage in a variety of sectors, including metal and mining, oil, and others. Mineral grades come in light and heavy grades, and their use is entirely based on the end-use requirements.
Base oil, thickeners, and additives are all used in synthetic ones. They have a number of benefits over mineral-based products. They give additional weather protection, enhance fuel efficiency, prevent oxidation, and increase engine power significantly. The category is predicted to develop rapidly throughout the forecast period as a result of these rising advantages. Semi-synthetic oils, also known as synthetic blend oils, include a tiny percentage of synthetic oil that is blended with mineral oils to improve their qualities without raising the price. Semi-synthetic oil performs better at lower temperatures, which is expected to increase lubricant demand in automotive applications.
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High Demand from Automotive Segment to boost the Market Growth
The automotive segment held the largest share in the global market. The segment is anticipated to showcase ascendant demand over the coming years due to the rising possession of passenger cars by customers. In automotive sector, lubricating oils are used to reduce the friction between two components of the vehicle and they also help in controlling the temperature by absorbing the heat generated by the moving parts.
Global demand for general industrial oils is predicted to rise as the world becomes more industrialized. They're made to keep the machinery functioning at optimal efficiency at high speeds. They are widely utilised in a variety of sectors, including manufacturing, oil and gas, food processing, and so on. The other applications include marine, military, aviation, and others. Marine oils are designed for high, medium, and slow speed marine engines. These are also used in the aviation industry in a wide range of applications such as gears, piston rings, bearings, and others.
Asia Pacific Lubricants Market Size, 2021 (USD Billion)
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Asia Pacific is anticipated to remain a key market during the forecast period owing to the rising demand from the industrial and automotive sectors. Factors such as rising population and increased investment in a variety of industrial sectors are driving demand for market. The growing population is driving up demand for automobiles, which in turn is driving up demand for automotive oils. In the global market, Asia Pacific is predicted to develop at the fastest rate. Due to rising demand from the automotive sector, China, Japan, and India are the primary countries contributing to the region's market growth. Owing of the region's economic diversity, progressive corporate attitude, rising household income levels, and, perhaps most importantly, the region's latent potential to evolve into one of the world's top economies in the future, ASEAN is an interesting market for investment.
ASEAN is one of the most tempting investment areas for lubricant firms. The range of manufacturing sectors in separate ASEAN countries, as well as their varying growth trajectories, provides a spectacular and ever-changing market, with potentially lucrative niche opportunities emerging for lubricant companies who can capitalize on the trend.
The automotive industry dominated the market in North America. The U.S. comparatively large automobile sector has led to the market's tremendous rise. Furthermore, the industrial sector has shown constant expansion throughout the years and is likely to continue in the next years.
North America consumes a lot of environmentally friendly items as a result of rigorous environmental protection legislation. Large important firms such as ExxonMobil Corporation, Royal Dutch Shell, and Chevron Corporation are present in the U.S. The market has been characterized by severe competition because all of the major industry participants are focused on developing their customer base in order to gain a competitive advantage over other companies in the ecosystem.
Europe is expected to be the market's fastest-growing region. The market in this area is likely to be driven by the increasing development of high-end machinery and equipment for industrial applications. In addition, the market is likely to be driven by rising demand for equipment flexibility and the need to improve vehicle efficiency.
Lubricant goods have a developed market in Europe. Furthermore, several European countries have strict regulations regarding the use and disposal of lubricating oils, which has significantly increased demand for bio-based lubricants. During the forecast period, the demand for technically advanced lubes is likely to rise in the area due to continued advancements in the automobile industry.
The economic slump has had a detrimental impact on Latin American demand, but it remains above normal due to the automotive industry's requirements. Brazil and Mexico, the two largest vehicle markets in Latin America, make up the Latin American automotive sector. The two countries struck a free trade agreement on the selling of light commercial trucks and auto parts.
Heavy vehicles (trucks and buses) will be included in the agreement effective in 2022, which shall result in lower quotas and fees on exports and imports.
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The Middle East is rapidly developing; yet, the region's development is mostly determined by the dynamics of the petroleum industry. Despite socio-political turmoil, the region's vast oil and gas reserves make it a vital element of the industry. The drop in crude oil prices caused an economic slowdown, but countries have made improvements to their economies, which bodes well for future demand for all sorts of lubricants. In Africa, increased car usage and a shift in the middle-class population are producing potential demand for automotive lubricants. In addition, government regulations and OEM requirements are pushing the industry forward.
Market Players to Strengthen Their Positions by Offering Various Solutions
The major producers are located in Europe, but the demand is high from Asia Pacific. It is leading to the creation of a consolidated market. The producers in Europe & North America are continuously engaged in acquisitions, and mergers in order to strengthen their market position and to drive business growth. As a result, the key players in the market have developed strong distribution channels, regional presence, and product offerings. Manufacturers such as Shell, ExxonMobil, Total are focusing to introduce new products and strengthening distribution channels to better serve the industrial consumers.
An Infographic Representation of Lubricants Market
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The global lubricants market research offers a thorough analysis of the industry, focusing on major elements such as the market share, leading companies, types, and product applications. Apart from that, the research provides information on market trends as well as significant industrial developments. In addition to the aforementioned variables, the study includes a number of others that have contributed to the market's recent expansion.
Volume (Kilo Tons) and Value (USD Billion)
By Type, By Grade, By Application, and By Geography
Fortune Business Insights says that the global market size was USD 117.78 billion in 2021 and is projected to reach USD 139.12 billion by 2029.
In 2021, the APAC market value stood at USD 53.38 billion.
Growing at a CAGR of 2.1%, this market will exhibit steady growth in the forecast period (2022-2029).
Automotive segment is expected to be the leading segment in this market during the forecast period.
The growing need for smooth and effective functioning of machines is driving the market growth.
Asia Pacific held the highest market share in 2021.
The rising demand for synthetic lubes is expected to contribute to the growth of the market during the forecast period.
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