It is a known fact that the conventional lubricants market is projected to be flat to declining in the foreseeable future. To offset these declines and both maintain and grow their market share, businesses need to look for opportunities in various market segments, with synthetics being one of them. Sales of synthetic and semi-synthetic lubricants are projected to grow at a CAGR of 5.7% and 3.9%, respectively, between 2018 and 2023.
Synthetic and semi-synthetic commercial lubricants are projected to grow the fastest. However, fleets are still hesitant about the widespread adoption of these lower viscosity engine oils, as they maintain older vehicles as well as ancillary engines which still require 15W-40 and do not want to carry two separate bulk fluids for their vehicles. As fleets modernize, this problem will become less of an issue, but it is a challenge in the current market to help fleets change fluids to a fuel economy grade, helping to reduce their operating costs and save fuel while reducing downtime.
The consumer lubricants sector is estimated to grow more in terms of volume demand. In this segment, the majority of major vehicle OEMs are using synthetic lubricants for factory fill for engine oil, ATF, and gear oil and recommending similar specification fluids for service fill of their vehicles. Some smaller, regional OEMs are still using conventional factory fill; however, they are transitioning to lower viscosity fluids to meeting emission and fuel economy regulations that have already been implemented.
In mature markets, lubricant marketers are witnessing product proliferation in the full synthetic category. There are three product tiers for full synthetics: an entry-level full synthetic offering; a standard, or premium, full synthetic lubricant; and an ultra-premium full synthetic product offering. Entry-level synthetic lubricants are starting to gain market share as several major marketers are targeting consumers with vehicles that require a full synthetic, yet they prefer to pay prices closer to conventional products.
Another trend—fill-for-life—is driving synthetic lubricant use in automatic transmissions and axles, as the added convenience for the consumer provides an additional selling point for OEMs.
In the industrial segment, gear oils (PAGs and PAO/ester blends), greases, and aviation turbine oils for aero-derivative stationary turbines are increasing as a result of growth in the wind power generation industry. In the wind power generation industry, synthetic gear oil (PAGs and PAO/ester blends) and greases are growing due to their various benefits, such as extended drain intervals, reduced maintenance costs, longer life, and greater in-service efficiency compared to conventional fluids.
To learn about business opportunities globally, in existing markets for synthetic lubricants, in emerging markets, new product developments and channels to market, or gain customer feedback regarding the usage of synthetics and key benefits perception, subscribe to Global Synthetic Lubricants: Market Analysis and Opportunities report.
