East Africa Automotive Lubricants Market Research Report: Forecast (2023-2028)

Market Definition

Automotive lubricants are liquids/fluids used in internal combustion engines to reduce the friction, overheating, and wear & tear that occurs during the functioning of the motor. They are manufactured from different materials, including natural, synthetic, and semi-synthetic, which offer different degrees of protection to the engine parts.

Market Insights & Analysis: East Africa Automotive Lubricants Market (2023-28)

The East Africa Automotive Lubricants market is projected to grow at a CAGR of around 4.83% during the forecast period, i.e., 2023-28. Some of the factors that have attributed to the growth of the market are expanding vehicle ownership in the East African countries with the increase in disposable income as well as improving road infrastructure. These improvements in the East African countries have led to encouraging customers to own vehicles, which has resulted in enhancing the vehicle fleet on the road, subsequently promoting the demand for automotive lubricants.

Additionally, the countries such as Ethiopia, Somalia, Kenya, Tanzania, etc., are sizeable markets for second-hand/pre-owned cars & motorcycles that are imported to these countries from Asia & Middle Eastern countries. These pre-owned vehicles are priced economically, compared to new vehicles, thereby improving the affordability of the customers to purchase new vehicles.

According to Kenya Auto Bazaar Association, the sales of used/second-hand cars have risen by 30% in the first three months of 2022, which is further expected to grow with the lower availability of new cars in the country. Various models such as Toyota Harrier, Toyota Fielder & Toyota Premio, and Nissan Sylphy are prevailing, with their sales in the Used Automotive Vehicle market in Kenya.

Additionally, two-wheeler sales in the economy price range are another crucial reason why vehicle ownership among consumers has grown, thereby promoting the sales of these lubricants in the East African market. However, the sales of automotive as well as their lubricants were impacted in the year 2020 due to the COVID-19 pandemic. COVID-19 led to the cessation of economic activities in the major vehicle manufacturing & exporting countries across the globe, hence affecting the availability of vehicles in the respective East African countries. Nevertheless, with the revival in economic activities & the surge in the inflow of automotive vehicles, the market for this lubricant has exhibited a rapid upsurge, which is expected to continue in the forecast years, i.e., 2023-28.

Market Dynamics

Key Driver: Rising Vehicle Fleet Size Due to Improved Living Standard to Promote the Market

The East African countries have witnessed a sustained upsurge in the sales of automotive vehicles that has led to an increase in the demand for automotive lubricants such as engine oil. Brake & gear oil, transmission fluid, etc. The lower prices of pre-owned cars in East African countries have enhanced the sales of automobiles. The sales in the countries have also increased with the growing need for personal vehicles by customers. For instance, as per the automotive database service provider Focus2Move, Kenya’s automotive market, with sales of around 5,400 new cars, exhibited an increase of nearly 4.7% in 2022 compared to 2021. A similar growth trend was observed in Ethiopia, with sales of about 1,503 cars in 2022 & around 5.6% growth from 2021.

Additionally, the region is also experiencing a sizeable influx of pre-owned cars from other regional markets, such as the Middle East & Asia-Pacific regions, that are relatively economical compared to the newer ones. Hence, this is again a notable factor due to which the market is expected to witness a substantial growth rate in the forecast years.

Possible Restraint: Growing Adoption of E-vehicles to Lower the Demand

The Electric Vehicles market is in the introductory phase, with a limited number of options being available to customers. However, with the growing inclination of customers towards an environment-friendly approach & reducing the operating cost of the vehicles, the adoption of EVs has grown noticeably. Electric cars have no moving parts except for the motor, due to which no combustion or heat is being produced, thus eliminating the requirement for engine oil & other lubricants. Various other features, such as lower cost of charging, higher torque production, sustained power regeneration through braking, etc., have also attracted several new customers. Therefore, with the increased adoption of electric vehicles, it is expected that the market would face a steep challenge in the coming years.

Growth Opportunity: Collaboration with Automotive Manufacturers for Efficient Product Placement

The automotive industry in the East African region is in its progressing stage, with a rapid boost in demand for new vehicles, especially in the passenger cars, commercial vehicles, and two-wheeler segments. Vehicles of different types are suited to several types of automotive engine oil for their improved functionality as well as for enhancing their operational life. To offer longer-lifecycle to the vehicles, the automotive brands often collaborate with the lubricant manufacturers & use a particular engine type oil by the respective brand. This is a key phenomenon that not only benefits the automotive manufacturer but also benefits lubricant brands to improve their sales through service centers as well as product placement with enhanced awareness among the vehicle owners.

 Key Trend: Inclination Towards Green Engine Oil & Lubricants as Mandated by the Government to Increase its Adoptions 

Green lubricants & engine oil are increasingly becoming popular among car owners & industry manufacturers. The usage of synthetic & various other types of engine oil produces harsh chemical waste at the end of the lifecycle. Due to this, a vast amount of waste fluid is being generated, which is harmful to the environment. To adopt sustainable practices, many automotive lubricant manufacturers have started offering natural & green engine oil & lubricants for various automotive vehicles. With the increasing focus on green oil, it is anticipated that the automotive lubricant manufacturing industry would consider shifting towards greener alternatives, subsequently promoting market growth during 2023-28.

Market Segmentation

Based on Type:

• Engine Oil
• Gear Oil
• Transmission Fluids
• Brake Fluids
• Greases
• Coolants & Antifreezes
• Others (Additives, Oil Blenders, etc.)

Of all, Engine Oil grabbed a significant market share in the East Africa Automotive Lubricants market. The engine oil type has benefitted due to the higher frequency & volume of usage in automotive. It has also been linked with the performance & stress handling of an engine & comprehensively with the usage life of a vehicle. This lubricant type is also suited to multiple applications in an engine, such as corrosion resistance, sealant, coolant, lubrication, engine cleaning, etc. Hence, these factors, along with the requirement of engine oil that provides a longer range of running & lesser requirement of changing oil, have attracted a large number of customers to opt for synthetic engine oils.

Based on Vehicle Type:

• Two Wheeler
• Passenger Cars
• Commercial Vehicle
  • Light Commercial Vehicle
  • Medium & Heavy Commercial Vehicle

Commercial Vehicles & Passenger Cars held a sizeable share of the East Africa Automotive Lubricants market during 2018-22. With the higher running & traveling through longer distances, the need for the proper engine oil change, lubrication, brake oil fluid change, etc., are on the higher side for commercial vehicles. Commercial vehicles also face higher wear & tear due to their nature of work & traveling through various temperatures & terrain. Hence, this dynamic functioning & environment inflict a lot of stress on the engine, due to which the demand for automotive lubricants for commercial vehicles has been on the higher side.

Moreover, Passenger cars are another rapidly growing category in the country that has witnessed a rapid surge in the historical years with the increasing new car ownership as well as the rise in pre-owned cars being imported from other regions such as the Middle East & Asia-Pacific countries. The average travel distance for passenger cars in the region is also on the higher side due to the harsh environment as well as the high temperature in the poor road infrastructure. Therefore, with the heightened car & commercial vehicle fleet in the country, it is expected that the automotive lubricant sales in the respective category would maintain their stronghold with a sizeable market share in the forecast years.

Regional Projection

Geographically, the market expands across:

• Ethiopia
• Kenya
• Somalia
• Tanzania
• Uganda
• South Sudan
• Others

Kenya & Uganda are expected to be the most prominent regions contributing to the growth of the Automotive Lubricant market during the forecast years. Kenya & Uganda are some of the largest economies in the region, having the largest fleet of automobiles with their large population & becoming major driving forces for the enhanced market. The automotive demand for the countries is majorly fulfilled with imported products with limited domestic manufacturing capability. However, with the sustained boost in demand for automotive vehicles, many new manufacturing units are being established in the countries to support the domestic market expansion as well as keep the prices of automobiles in check. For instance,

• In 2021, the government of Kenya, under its National Automotive Policy 2019, announced to double the production of automobiles by 2025.

Additionally, various other projects in countries such as Uganda, Ethiopia, etc., would also be initiated in the forecast years, thereby enhancing the demand for automotive sales & promoting market growth during 2023-28.

Recent Developments by the Leading Companies

• 2023: Castrol Kenya & Rubis Energy Kenya announced their partnership to launch a wide range of automotive lubricants. According to Castrol, the respective categories are targeted – petrol, diesel, and transmission machinery.   
• 2022: Indian automotive lubricant manufacturer Maxximus announced to triple its capacity in the East Africa region, as the company operates through a wholly owned subsidiary, Nairobi, Kenya-based MX Africa Ltd. The company would enhance from its existing 20,000 kl/year to 60,000 kl/year with a total cost of USD3.1 million.

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