"Innovative Market Solutions to Help Businesses Make Informed Decisions"
The global lubricants market size was USD 115.86 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with the product witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a huge decline of 8.1% in 2020. The market is projected to grow from USD 117.78 billion in 2021 to USD 133.55 billion in 2028 at a CAGR of 1.8% during the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Lubricants are fluids, oils, or greases that reduce the friction between two surfaces when they are in mutual contact. These fluids play an important role in automotive and industrial applications, as they help reduce friction between the operating parts. They are also used to prevent the machinery parts from corrosion, thermal stability, and oxidation.
Over time, growing competition among key industry leaders is aiding the market growth. Key manufacturers are strongly investing in the global market to stay ahead of the competition. For instance, in October 2020, Shell expanded its portfolio to deliver end-to-end lubrication products and services to companies in various industries, ensuring the equipment runs smoothly. Shell has prioritized its emphasis on serving the primary metals and power industries to add additional brands to its portfolio as part of this market growth.
COVID-19 Impact: Production Halt in Industries & Declined Automotive Sales to Restrain Market Growth
During the COVID-19 pandemic, extended lockdown in key manufacturing industries such as metalworking, fabricating, oil & gas, chemicals, consumer goods across all regions led to short term production halt. Thus, demand for lubricating oils from the industrial sector suddenly went down. However, with the gradual lifting of lockdown, the industrial sector resumed its operation partially.
Due to the pandemic, it will take more time for the industrial sector to operate under full capacity. This further lowered lubes consumption. Besides, global production of automotive was severely impacted amid COVID-19. According to the International Organization of Motor Vehicle Manufacturers, there was a collectively 16% drop in world auto production. Also, most owners hardly used their cars or bikes due to work from home, which further helped decline consumption. As the auto sector represents the largest consumption of lubricating oils, the declined sales & use plunged the market's growth.
Request a Free sample to learn more about this report.
Rising Demand for Synthetic Lubricants to Aid Market Growth
Due to increased awareness about alternative solutions for mineral oil-related goods, demand for synthetic lubes for large-scale industries has increased in the global market. The growing automotive industry and industrial growth are projected to fuel synthetic lubricant demand.
Synthetic types have gained importance due to their superior efficiency over natural mineral oils and have increasingly begun to become the preferred choice of lubricant for different industries that require high levels of consistency. By far, the most common synthetic base oil used in industrial and automotive is polyalphaolefin. They have lower volatility, a higher viscosity index, a lower pour point, and greater oxidative/thermal stability due to their intrinsic physical and chemical properties.
Increasing Demand for Better Lubrication from Industrial Sector to Drive Market Growth
With the increasing cost of energy required to run industrial operations, the industrial sector is taking necessary steps in saving energy to reduce the overall cost of the operation. The engine parts that lack lubrication are more prone to frictions, and thus, they utilize more fuel, leading to emission and pollution. This, in turn, puts combined pressure on manufacturers to lessen the environmental impact with a significant reduction in operating costs. The maintenance departments are more focusing on reducing maintenance costs by improving machinery utilization and reliability. In this process, a good quality lubricant plays an important role in reducing friction between parts while increasing machine efficiencies. For instance, as per the independent tests authorized by The National Lubricating Grease Institute, gears lubricated with synthetic lubes showcased less friction on account of excellent viscosity, density, and higher molecular weight. PAO & PAG-based gear oils also reduce maintenance costs in cylindrical gears due to less churning losses at lower temperatures and less gear erosion.
Due to higher energy costs, even a small reduction in energy consumption can significantly improve dollar savings. The potential of energy saving can be different for different operating machines. With the significant improvement in lubrication, one can increase the company’s overall earnings. Thus, rapid industrialization and strict environmental regulations imposed on manufacturing industries are projected to drive the global market growth during the forecast period.
Increasing Adoption of Electric Vehicles to Hinder Market Growth
The automotive segment is a major contributor to the consumption and growth of the global market. In conventional vehicles, various oils are used to keep engine quality intact for a longer run. However, with the increasing pressure on crude oil resources and the rising environmental concerns, consumers in developed & developing countries are interested in electric vehicles. Moreover, with continuous technological growth, the advantages offered by electric vehicles are improving. The increasing adoption of electric vehicles is projected to limit the growth in the automotive segment.
For instance, according to the International Energy Agency, in 2018, there were 45% of electric cars in China compared to 39% in 2017. It is the largest and fastest-growing market for electric vehicles globally and is considered the global hub for electronic & electrical component manufacturing. Leading electric vehicle manufacturers such as Tesla to invest in the Chinese market to tap into this segment's potential opportunities. Also, electric vehicles have already gained popularity in developed countries such as the United States, Japan, Western Europe.
Automotive Segment to Generate Highest Revenue
The automotive segment is expected to hold the largest lubricants market share due to the automotive sector's escalating demand. Economic growth in developing countries is further increasing the ownership of vehicles, which will spur the demand. However, the overall segment is expected to showcase a steady rise in developed countries such as the U.S. and Japan. The industrial segment holds a significant share in the global market due to rapid industrialization in developing countries. 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. The marine oils and process oils segments hold smaller shares than the automotive and industrial segments due to their fewer applications.
Mineral Grade Segment Holds Largest Market Share
The mineral grade is the most commonly used product as it is cost-effective compared to synthetic and semi-synthetic. Moreover, they are derived from crude oil and produced in large quantities in various industries such as metal & mining, oils, and others. Mineral grades are available in light grade and heavy grade, and the usage is completely dependent on the end-use requirements.
Synthetic ones are composed of base oil, thickeners, and also additives. They provide various advantages over mineral-based products. They provide extra weather protection, improve fuel economy, reduce oxidation, and provide considerable engine power growth. Owing to these growing advantages, the segment is expected to grow exponentially over the forecast period. Semi-synthetic, also known as synthetic blend oils, contain small amounts of synthetic oil and are blended with mineral oils to boost their properties without increasing the cost. Semi-synthetic oil offers better performance at lower temperatures, set to fuel its demand in automotive applications.
To know how our report can help streamline your business, Speak to Analyst
Automotive Segment to Exhibit Highest CAGR
The automotive segment held the largest share in the global market. The segment is anticipated to showcase considerable growth during the forecast period. This is due to the rising possession of passenger cars by customers. In automotive, lubricating oils are used to reduce the friction between two components of the vehicle. They also help control the temperature by absorbing the heat generated by the moving parts.
The rising industrialization is expected to increase the demand for general industrial oils in the market. They are designed to keep the equipment running at high speed with maximum efficiency. They are extensively used in numerous industries such as manufacturing, oil & gas, food processing, and others.
The other applications include marine, aviation, military, and others. Marine oils are designed for high, medium, and slow-speed marine engines. These are also used in the aviation industry in various applications such as gears, bearings, piston rings, and others.
Asia Pacific Lubricants Market Size, 2020 (USD Billion)
To get more information on the regional analysis of this market, Request a Free sample
Asia Pacific is anticipated to dominate the global market during the forecast period. The market size of Asia Pacific was USD 52.12 billion in 2020. This is owing to the rising demand from the industrial and automotive sectors. Factors such as rising population and increasing investment in several industrial sectors are pushing demand for advanced lubrication in the region. The rising population is creating a higher demand for vehicles, which, in turn, will create a subsequent demand for automotive oils. China, Japan, and India are the key countries contributing to the market growth in the region owing to the increasing demand from the automotive sector.
ASEAN is an exciting market because of its economic diversity, progressive business outlook, increasing household income levels, and, perhaps most significantly, the region's latent potential to grow into one of the world's leading economies in the future. For lubricant companies, ASEAN is one of the most appealing investment destinations. The variety of manufacturing sectors and their varying growth trajectories in individual ASEAN countries creates an interesting and ever-changing market, with potentially lucrative niche opportunities appearing for lubricant players who can capitalize on the trend.
In North America, the market is driven by the rising automotive industry. The comparatively large automobile industry in the United States has contributed to the significant growth of the market. Furthermore, the sector has seen consistent growth in the industrial sector over the years. Besides, many industries in the United States are reshoring their manufacturing bases, increasing the demand for industrial lubes.
Owing to strict environmental protection laws, North America consumes a lot of environment-friendly products. In the United States, there are established key players such as ExxonMobil Corporation, Royal Dutch Shell, and Chevron Corporation. Since all major industry participants are focused on growing their customer base to achieve a competitive edge over other players in the ecosystem, the market has been characterized by fierce competition.
Europe is projected to showcase significant growth in the market. The increasing development of high-end machinery and equipment for industrial applications is expected to drive the market in this region. Also, the increasing demand for equipment flexibility and the necessity to surge the efficiency of vehicles will drive the market in the region. Furthermore, many European countries have stringent rules on the use and disposal of lubricating oils, which would increase the demand for bio-based lubricants. With the continuous advancement in the automotive industry, the demand for technically advanced lubes is expected to increase in the region during the forecast period.
The demand in Latin America was negatively affected by the economic downturn, but it still has above-average demand due to the automotive industry's requirement. The Latin American automotive industry comprises the two biggest automobile markets, Brazil and Mexico. A free trade agreement was signed between the two nations to sell light commercial trucks and auto parts. As of 2022, heavy vehicles (trucks and buses) will be included in the agreement, which reduces quotas and fees on exports and imports.
The market in the Middle East is developing swiftly. However, the regional growth is predominantly dependent on the dynamics of the petroleum industry. Although the region faces socio-political disturbances, huge reserves of oil and gas make this region a fundamental part of this industry. The fall in crude oil prices led to an economic slowdown, but countries have introduced changes to their economies and represent potential demand for all types of lubricants in the upcoming years. In Africa, a significant economic development in the middle-class population and the rising vehicle consumption creates potential demand for automotive lubes. Also, government legislations and requirements from OEM’s are pushing demand for eco-friendly products in the region.
Market Players to Strengthen Their Positions by Offering Various Lubricant 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 lubricants market. The producers in North America and Europe are continuously engaged in mergers & acquisitions to strengthen their market position and drive business growth. As a result, the key players have developed a strong regional presence, distribution channels, and product offerings. Manufacturers such as ExxonMobil, Shell, Total are focusing on introducing new products and strengthening distribution channels to serve industrial consumers better.
An Infographic Representation of Lubricants Market
To get information on various segments, share your queries with us
The global lubricant market research report provides a detailed analysis of the market and focuses on crucial aspects such as production technologies, leading companies, and application segments. Besides, it offers insights into market trends, price trends and highlights vital industry trends and developments. In addition to the factors mentioned above, the report encompasses various factors contributing to the market growth over recent years. The competitive landscape section covers the detailed profiles of leading key players operating in the global market.
Volume (Kilo Tons); Value (USD Billion)
Fortune Business Insights says that the market was USD 115.86 billion in 2020 and is projected to reach USD 133.55 billion by 2028.
The market will exhibit steady growth at a CAGR of 1.8% in the forecast period.
The automotive segment is expected to be the leading segment in the market.
The increasing demand for smooth and effective functioning of machines is driving the market growth.
Asia Pacific is expected to hold the highest share in the market.
The rising demand for synthetic lubes is the key market trend.
“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”- One of the Leading Food Companies in Germany
“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”- Intuitive Surgical
“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”- Major Food Company in Japan
“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”- Ziering Medical
“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”- Major Manufacturer of Precision Machine Parts in India
“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”- Hewlett-Packard
“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”- Global Management Consulting Firm
“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”- UK-based Start-up in the Medical Devices Sector
“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”- One of the Largest Companies in the Defence Industry