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

Market Definition

The fluidic substances used for reducing friction between surfaces and preventing wear and tear of automobile components are automotive lubricants. They minimize the heat generated between parts, and efficiency and functioning improve critical components such as engines, hinges, bearings, and hydraulic gears. They are used for brake and fuel systems, body part stamping, transmission manufacturing, and other automotive mechanics.

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

The India Automotive Lubricants Market is projected to grow at a CAGR of around 2.0% during the forecast period, i.e., 2023-28. The market growth is attributed to the rising disposable income in the region because of rapid urbanization, affecting the standard of living and raising automotive sales to fulfill consumers’ desire to own a personal vehicle instead of public transport. Also, the maintenance of luxury cars further incorporates the implementation of lubricants, securing industrial extension. Thus, the rising penetration of on-road vehicles, private cars for transportation, consumer affordability, and maintenance habits, combined with the presence of aging vehicles exhibiting the scope of their care, further fuels the market expansion.

In addition, stable crude oil prices with the growing awareness among consumers about the benefits of highly efficient engine oils, along with the advantages of regular oil change & maintenance extending the vehicle’s life & quality, are also adding to enhancing the India Automotive Lubricants Market size. Furthermore, governmental initiatives towards increasing road infrastructures and constructing new highways to facilitate automotive penetration in the traffic are likely to open new opportunities and growth avenues for the market. Contrarily, the rapid adoption of electric vehicles could hinder market expansion, as electric motors denounce the need for automotive lubricants or oil changes. However, the multitude of applications of engine oils to maintain the high fleet of on-road vehicles in the region secures product sustainability in the industry.

Market Dynamics

Key Driver: Rising Disposable Income Promoting Automotive Sales

As a result of the emerging economy and spreading urbanization, there is a constant hike in consumers’ disposable income. Additionally, given to modernization and willingness to own a personal vehicle have been powering automotive sales in the country. As a result of rising disposable income and a hike in living standards, surging automotive sales have been driving the market, as lubricants play a vital role in the smooth working of engines and vehicles. Their characteristics of durability, vehicle protection, reduction of friction between the engine parts, and more are essential to extend vehicle life, especially regularly further expanding the industry.

Possible Restraint: Shifting Government Focus Towards Electric Vehicles

With rapid urbanization, increasing disposable income & accessibility to new technology & resources, and further advancement in the country’s automotive sector, the emergence of electric vehicles is gaining traction. However, this shift is actively supported by various government initiatives and investments to facilitate the country’s EV transition, which impedes a threat to the industry as it diminishes the requirement for engine oil or grease as a whole by replacing the engine with an electric motor. Besides, the presence of lesser components and parts in the vehicles and the depreciation of various parts with the implementation of technology and advanced gadgets further pose a hindrance to the automotive lubricant market.

Growth Opportunity: Emerging need for Coolants and Fluids for Electric Vehicles

Though electric vehicle does not need engine oil and similar lubricant which enhances automotive engines, they still require lubricants in vital electrical components such as coolants for the car battery, gear oils for differentials, chassis, gear reducer, and wheels, brake fluids and grease for other components of the EV. By reducing torque, the low-viscosity lubricant ensures the smooth function of the electric vehicle and enhances its quality and life. The EV lubricants must be compatible with other EV parts, thus ensuring cooling, volume resistivity, dissipation factor, and dielectric strength to avoid electrical losses in the system and further thermal management without harming the components. Moreover, such products have greater technical requirements, and thus currently, it is still in their developmental stage opening new avenues of opportunity for the industry. For instance,

• In January 2023, Valvoline announced that it is ready with a new line-up of fluids designed for Electric Vehicles in India.

Key Trend: Substantial Investment in the Improvement of Road Infrastructure & Connected Highways

The governmental programs and policies are working towards improving the infrastructure and building connecting highways between significant traffic points and major cities to resolve the under-penetration of vehicles in many urban and rural areas fueling the market expansion. Moreover, the government has been aiming to construct various national highways and transform the road infrastructure of numerous states. For instance, under the Union Budget 2022-23, the Government of India allocated a higher investment of INR 199,107.71 crores (USD 26.04 billion) to the Ministry of Road Transport and Highways. These aspects are leading to more vehicle utilization and further avenues for market growth. 

Market Segmentation

Based on Vehicle Type:

• Passenger Car
• Light Commercial Vehicle
• Medium & Heavy Commercial Vehicles
• Off the Road (OTR)
• Two-wheelers
• Three-wheeler

Among all, Passenger Car is estimated to acquire the largest share in the India Automotive Lubricants Market during the forecast period, aided by the significant consumption of transmission and gear oil. Moreover, as lubricants provide durability and protection while increasing the efficiency of passenger vehicles, and they are individually owned and manually maintained by the consumers, they further influence the regular application of required products.

Also, according to the Society of Indian Automobile Manufacturers (SIAM), The Total Passenger Vehicle Sales increased from 2,711,457 to 3,069,499 units. Thus, the surging production and sales of vehicles promise lucrative opportunities for the industry. Passenger cars require high-performance greases due to properties like mechanical stability, temperature tolerance, water resistance, and oxidant resistance. In addition, grease is used in various auto parts, such as wheel bearings, universal joints, suspensions, gears, switches, and connectors, thus expanding the lubricant applications and further fueling the market growth.

Based on Type,

• Engine Oil
• Gear & Brake Oil
• Transmission Fluid
• Grease
• Others

Here, Engine oil is anticipated to dominate the market during the forecasting period. The market hike imputes to the growth in production of the automotive sector, promoting a surge in consumption and demand for engine oils. Besides, the high production and sales of two-wheeler vehicles further prosper the consumption of lubricants, expanding the segment’s market. The requirement of engine oil secures its position in the industry through applications such as protection from wear, tear & corrosion, varnish & sludge, lubricating internal combustion, and maintaining the smooth operation of the engine and different parts of it by creating a thin film between the moving parts for enhancing the transfer of heat and reducing tension during contact.

Furthermore, the bolstering number of gasoline and diesel vehicles present in the region also safeguards the utilization of engine oils. Moreover, commercial and high-duty vehicles such as tractors, off-the-road vehicles in construction and farming, trucks, and others require engine oil for healthy functioning. As a result, they are less likely to be replaced by other technologies ensuring industrial growth.

Recent Developments in the India Automotive Lubricants Market

• In January 2023, McLaren Automotive, a luxury supercar company, announced the renewal of its partnership with Gulf Oil International as its official lubricant and fuel partner for 2023.
• In June 2022, Shell introduced a used oil management service as part of a new attempt to organize India's waste oil disposal infrastructure and enhance re-refining rates. Shell partnered with used oil refiners to start collecting and re-refining used oil across India.
• In April 2022, Indian Oil invested USD99 million to build a refinery and set up a greenfield facility in the Northeast, expanding its storage space for petroleum, oil, and lubricant storage.

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