Engine oil is the most essential lubricant that is used in a vehicle this oil is used to lubricate the internal combustion engine as it prevents wear and tear by lubricating the internal parts of the engine and allowing them to run smoothly by cleaning the sludge of the engine.
The market for automotive engine oils is poised to witness a nominal growth over the course of the next five years. The key factor supplementing the growth includes the increasing concerns of the vehicle owners towards the faster deterioration of engine components due to wear and tear. The rising adoption of enhanced quality lubricants is bolstering market growth until the end of the forecast period. The constantly increasing disposable income and the rapid urbanization in the various developing economies around the globe have led to an increase in the sales of automobiles, which is further providing an impetus for the market to grow in the near future. Also, the growing use of synthetic products is also propelling the business opportunities for the manufacturers to expand their market share during the forecast period.
Furthermore, the rising requirements to meet stringent regulations regarding vehicle emissions and safety are also projected to expand the automotive engine oil market during the coming years. The graph below represents the market size of automotive engine oil that shows the market reached US$12.866 billion by 2025 from US$9.931 billion in the year 2019. However, the volatility in the prices of oil and petroleum is projected to restrain the market growth to a certain extent.
Global Automotive Intercooler Market, Forecasts From 2019-2025, in US$ Billion
Source: Knowledge Sourcing Intelligence Estimates
Rising Automobile Sales
One of the key factors augmenting the market growth includes the constantly increasing sales of automobiles around the globe. The rapid urbanization, growing disposable income, and the growing middle-class population are the major factors that have led to an increased standard of living especially for those people who live in developing economies such as Brazil, India, and China among others. Since automotive engine oil is an important part of the maintenance and smooth functioning of the engines, the rise in the automotive vehicle sales is projected to positively drive the automotive lubricants market in the coming years.
Total Automotive Sales, 2010 to 2017, in Million Units
Source: International Organization of Motor Vehicle Manufacturers
The graph above represents the total sale of automotive units from 2010 to 2019. It states that the total automotive sales reached 91 million units by the year 2019 from 75 million units in the year 2010 (Source: OICA). In addition to this, there is a constant rise in the demand for commercial vehicles for both passenger and goods transport which is further fueling the demand for automotive vehicles globally. Moreover, the rising import and export activities combined with the budding e-commerce sector have also contributed positively to the growing vehicle sales, in turn budding the automotive engine oil market during the forecast period.
Recent COVID-19 Outbreak
The recent COVID-19 outbreak is anticipated to show a slight downfall in the demand for automotive engine oils due to the declining sale of automobiles as well as a decline in the production of automobiles. The recent advent of COVID has led to a temporary halt in the manufacturing activities across several industries as the government regulations such as social distancing and lockdowns have led to a decline in the production activities in various industries. Also, the disruption of the economic growth in various countries has led to a slight decline in the sales of vehicles as well. Thus, the advent of COVID-19 is expected to moderately impact the market growth especially during the short period of the next six to eight months. Also, the suspension of vehicle sports events and adventure sports due to the outbreak of novel coronavirus disease is also expected to negatively impact the demand for performance engine oils, thereby hampering the global automotive engine oil market growth during the short run.
Participation of Key Market Players
The participation by the key market players in the form of R&D for product portfolio expansions, partnerships, mergers, and acquisitions play a major role in shaping up the market growth as it further shows the potential for the market to grow in the near future. For instance, in July 2019, IndanOil announced the launch of a new range of high-performance lubricant products, SERVO SuperMile Plus and SERVO SuperMile for the new generation cars. Also, in June 2018, Shell plc and Maserati announced their collaboration for the induction of a brand new co-branded motor oil known as Shell Helix Ultra Maserati 10W-60, this will be considered as the only oil recommended on all the Maserati’s 2018 models that will be equipped with the V6 gasoline engines.
The global automotive engine oil market has been segmented on the basis of type, engine type, vehicle type, sales channel, and geography. By type, the market has been segmented as synthetic oil, synthetic blend oil, and conventional oil. By engine type, the market has been classified into petrol and diesel. By vehicle type, the market has been segmented on the basis of passenger vehicle and commercial vehicle. By the sales channel, the segmentation of the market has been done as online and offline. Geographically, the market has been distributed into North America, South America, Europe, Middle East and Africa, and Asia Pacific.
The Asia Pacific to Hold a Decent Market Share
Geographically, the Asia Pacific region is anticipated to hold a substantial share in the market throughout the forecast period due to the growing demand for passenger vehicles in major developing countries such as India, China, and Indonesia among others. The rapid urbanization, growing middle-class population are some of the factors bolstering the high demand for vehicles in the APAC region, thereby supplementing the automotive engine oils market growth during the next five years. Also, the stringent government regulations regarding vehicular emissions is also a major factor playing a significant role in shaping up the market growth in the APAC region over the course of the next five years.