Indian Lubricants: Kline’s Perspective of the Market

The Indian lubricants market remains one of the growth prospects in an otherwise flat global market; however, it has its own set of challenges. The year 2019 was significant for the Indian economy—the general election saw the incumbent government getting mandated until 2024, thereby providing political stability. However, the slowdown in the global economy has caught up with the Indian economy, as it consistently registered downward revisions in its economic outlook. This directly impacted automobile production, which contracted by 10%-12%, with the most severe shrinkage observed in commercial vehicles production. This had an immediate impact on first-fill demand; a cascading effect on the service-fill market is anticipated.

In addition, weaknesses in key industrial segments persisted. Index for Industrial Production (IIP), a key indicator reflecting the health of industries in India, remained low. Consequently, Indian finished lubricant demand managed a meager growth of 0.5% in 2019 from 2018. Overall, Kline estimates the Indian finished lubricant market at around 2.8 million tonnes (including process oils).

The Indian lubricant market is fiercely competitive, characterized by the presence of nationalized oil companies (NOC) such as Hindustan Petroleum (HPCL), Indian Oil (IOCL)and Bharat Petroleum (BPCL); international lubricant marketers such as Shell, Valvoline, Total, and ExxonMobil; and, homegrown marketers including Gulf Oil, Raj Petro, Savita, Columbia and Apar. Overall, HPCL is the leading finished lubricant marketer (including process oils), followed by IOCL and BPCL. Over the past five to six years, HPCL has swiftly expanded its market share both in additized lubricants and the process oil segment.

While volumetric growth has decelerated, India is making significant strides toward improving the quality of finished lubricants. These changes are primarily being made to address the menace of air pollution and improve vehicles’ fuel efficiency. One key change that will have a profound impact on lubricant quality in the automotive segment is the introduction of Bharat Stage VI (BS VI) norms. In general, there will be an accelerated switch toward lighter viscosity grades of lubricants, not only for engine oils but for transmission fluids as well.

On the commercial-vehicles front, compliance with BS VI is being targeted primarily with the help of hardware changes. However, a new market is opening for diesel exhaust fluid (DEF), which helps in scrubbing off harmful gases from exhaust before releasing them to the atmosphere. The market for DEF is currently small in India but will witness steep growth in the coming years.

A key feature of the Indian finished lubricant market is high demand for process oil products, which includes electrical transformer oil, white oils, and rubber process oils (RPO). These products account for close to one-third of the total finished lubricant demand. India is not only a key market for these products but a key exporter as well, serving markets in Africa, the Middle East, Southeast Asia, and other parts of the world.

While overall economic growth remains subdued in 2019, it is a general consensus that India will soon recover to its usual growth trajectory as structural changes and policy corrections start bearing results. However, the outbreak of COVID-19 and subsequent lockdown across the country to control its spread is adversely impacting economic activities. As the situation is still developing, its level of impact on finished lubricant demand is still unknown, but a prolonged lockdown will certainly result in a dip in lubricant demand. In the long run, despite the reduction in lubricant demand growth rates, India is expected to remain the fastest-growing major finished lubricant market. Due to a transition toward better-finished lubricant quality, the market outlook in terms of value is brighter than the market outlook in volumetric terms.  Nonetheless, the market is expected to register growth over the next five-year period, albeit at slower than historical growth rates.

This webinar will provide an overview of the Indian lubricants market, focusing on key trends, competition landscape, future developments, challenges, business opportunities, and major suppliers. It will assist to explore market opportunities and challenges for lubricant blenders and marketers, baseoil marketers, and additive companies.

Join this webinar to learn about:
• Indian lubricant market overview: opportunities, challenges and competitive landscape
• Lubricant demand across automotive and industrial end-use segments
• Trends and developments driving the Indian lubricant market
• Lubricant demand forecast over the next five years


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