A lubricant is a substance utilized to reduce friction between surfaces that are mutually in contact, ultimately reducing the heat generated when the surfaces move. In addition to industrial applications, lubricants are used for many other purposes mainly in the automotive industry.
Transmission fluids are high-performance lubricants that aim to protect gears from wear and also improves the ease with which gears are changed. Grease is also used as an automotive lubricant, where sealing is difficult and are at lower speeds. The automotive lubricants industry relinquish various opportunities for technology leaders to deliver value propositions targeted to specific needs.
A steady surge in commercial activities along with demand in number of automobiles globally has spurred the growth in the Automotive Lubricants Market Trends. Immense popularity of motorsports and auto racing, as well as increasing number of passenger cars, are also driving the market to peak levels. Moreover, increasing demand for passenger and commercial vehicles is fuelling the steadily growing market. Use of lubricants is very crucial in automobiles for heat generation, combustion products, friction/wear, sealing and material protection. Engine oil ensures easy ignition of the vehicle by the driver along with less fuel consumption as well as less wear. Automotive engine oils are used as pour point depressant, defoamer, detergent/dispersant, oxidation inhibitor, antiwear (AW)/extreme pressure (EP), and corrosion inhibitor.
The automotive lubricants market is segmented by type into gear oil, engine oil, grease, engine coolant, transmission fluids, and other fluids. Gear oil is a type of lubricant which is made specifically for transfer cases, transmissions, and differentials in trucks, automobiles, and various types of machinery. Basic properties include high viscosity and usually contains organosulfur compounds. On the other hand, engine coolant is a water-based liquid that tends to absorb the heat from the engine; then the coolant turns hot itself which is then transferred to a radiator located at the front of the car. Engine coolant is the best option rather than using water in the cars, as water is corrosive and destroys the inside of the engine and the water pump.
By vehicle, the market has been segmented into light, commercial, and heavy. High-performance lubricants are used to ensure that the vehicle works on optimized fuel consumption, increased torque, and reduced carbon emission.
The global automotive lubricant market is spread across Europe, North America, South America, Middle East, Asia Pacific and Africa.
The region of Asia-Pacific currently dominates the market due to developing countries such as China and India, where the automotive industry is surging at a tremendous rate. The growing demand for light passenger vehicles, the rise in the average lifespan of vehicles in operation, and the increasing number of vehicle manufacturing facilities owing to the low cost of production in these countries have fueled the increase in the production capacity. Increasing demand for light and heavy commercial vehicles propels the growth of markets for lubricant and coolant in these countries.
The U.S in the North America region will grow with the highest annual growth as estimated. Demand for automotive lubricants accounts for the substantial increase in demand for lubricants with performance and environmental advantages. The accelerating number of automotive vehicles in use will also generate profits.
Automotive Lubricants Market – Competitive Analysis
Some of the key players in the automotive lubricants market are ExxonMobil Corporation (U.S.A), Chevron Corporation (U.S.A), Fuchs Lubricants Co. (U.S.A), ConocoPhillips Corporation (U.S.A), and BP Plc. (U.K.)
British Petroleum Plc. is planning to get into a swap deal with ConocoPhillips. BP Plc. is in considerations of undertaking Conoco’s 24 percent interest in the Clair field. In exchange, ConocoPhillips is likely to take BP Plc.’s assets based in Alaska. This will help both the companies focus on the projects that yield higher outputs.
Russia based Lukoil, owner of Neftochim Burgas refinery in Bulgaria, is planning to construct a petrochemical complex at the site of the refinery. It is intended to be an upgrade compared to the old production unit. The company has undertaken this expansion to increase the access to cheap raw materials and to quench the demand for polypropylene complex in the markets of Bulgaria. This would be profitable for the company and in turn, will increase the value added.
Strategically, competing companies have economically invested heavily in R&D activities to develop advanced products to cater to the demands of the market. Various strategies are adopted to retain and expand their market share. The main approach of most companies within the global automotive lubricant market is that of expansion and entering into merger & acquisition as well as swap deals which allows two parties to exchange financial instruments. These strategies are widely adopted to achieve operational efficiencies and also spread their geographical presence in the global market. The market demands regular product innovation for product diversification and hence help secure a strategic market position.