Southeast Asia Two Wheeler Engine Oil Market Research Report: Forecast (2024-2030)

Market Insights & Analysis: Southeast Asia Two Wheeler Engine Oil Market (2024-30):

The Southeast Asia Two Wheeler Engine Oil Market is estimated to grow at a CAGR of around 4.9% during the forecast period, i.e., 2024-30. The demand for two-wheeler engine oils has witnessed a growth trajectory, driven by ongoing traffic congestion, rising fleet size of two-wheelers, and the need for high-performance engine oils. In 2023, the total registered two-wheelers of the region formed more than 25% market share in the global operational fleet. Therefore, the region is a hotspot for the two-wheeler engine oil suppliers. Moreover, the regional two-wheeler sales exceeded 15.8 million units in 2023, a year-on-year increase of around 2.87%.

The market is also influenced by regional preferences and the availability of different types of engine oils. The engine oil market is seeing advancements in oil formulation technologies, leading to products that offer better protection, improved fuel efficiency, and extended drain intervals. These innovations are particularly appealing in Southeast Asia, where cost-effectiveness and performance are key considerations. While urban areas have been the traditional focus, there is a growing emphasis on penetrating rural markets by expanding their distribution networks to reach consumers in smaller towns and rural areas, where there is significant potential for market growth.

The region has a sizable two-wheeler population as Indonesia and Malaysia are among the countries with the highest number of two-wheeler riders. Along with this, Southeast Asia is the region with the highest number of motorcycles in the world. As per the FST Data 2023, the ASEAN nations showed more than 240 million motorized two-wheelers compared to barely 75 million cars. As per the Jakarta-based Seasia Data 2023, nearly 73% of Vietnamese citizens rely on motorbikes as a mode of transport. This higher penetration rate of two-wheeled vehicles, i.e., motorcycles in Southeast Asian countries, like Vietnam, Laos, and Indonesia is generating the requirement for adequate lubricants to improve the bikes' functioning, thereby, enlarging the market size.

Like Western countries, consumers of lubricant products like engine oils in the region are quality-sensitive and need better products with affordable pricing. Therefore, the demand for lubricants that offer more features than traditional oil and are available at similar price ranges is gaining the attention of financially constrained individuals, significantly contributing to the engine oils market expansion.

Governments across Southeast Asia are implementing stricter environmental and safety regulations. The authorities have set standards which are typically regarding the sulfur content in engine oils and the disposal of used oils. Therefore, the top companies, like Castrol, Chevron, etc., are increasingly developing compliant products and investing in sustainable practices.

Southeast Asia Two-Wheeler Engine Oil Market Opportunity:

Rising Establishment of Two-Wheelers Manufacturing Unit to Boost Market Growth – Official Administrative Bodies of Southeast Asian nations are easing corporate taxes and laying policies to encourage foreign companies to set up their production plants in the region. Additionally, these countries have low-cost labor and have trade agreements with several developed and developing nations. As a result, top companies producing two-wheelers are setting up their manufacturing facility in the region. For instance, in late 2024, the company Hero MotoCorp announced to start assembly plant in Laguna City, the Philippines. These original equipment manufacturers require engine oil during the production of the two-wheelers. Thus, with the upcoming plans of the market players to set up the production plants of the two-wheelers, the demand for engine oils to provide adequate lubrication would continue to increase, supporting the market growth in the forthcoming years.

Southeast Asia Two Wheeler Engine Oil Market Challenge:

Growing Penetration of Electric Two-Wheelers Potentially Impedes the Engine Oil Market Expansion – In recent years, the carbon emissions in Southeast Asian countries, like Indonesia, Malaysia, etc., have increased tremendously due to the rapid industrialization & increasing transportation activities. As per the statistics, by the Our World Organization, in Indonesia, the annual carbon emissions in 2022 reached around 728.88 million, of which around 131 million was contributed by the transport sector. Similarly, the other Southeast Asian nations also recorded a surge in the Green House Gases (GHG). These emissions result in deteriorating health & adversely affect human health. As a result, the authorities of these countries are increasingly encouraging customers to opt for sustainable transportation modes, i.e., electric. Thus, consumers are shifting towards the electric two-wheelers and this growing adoption presents a challenge for the engine oil market. Electric two-wheelers are typically based on advanced battery technology and do not require the same type or volume of lubricants as their ICE counterparts. Along with this, these types of vehicles have fewer maintenance needs, which diminishes the demand for engine oil, thereby, challenging the growth prospects of the engine oil market in the region. Thus, as the transition towards electric two-wheelers in Southeast Asia increases, the requirement for lubricants will slow down, negatively impacting the overall engine oil sales.

Southeast Asia Two Wheeler Engine Oil Market Trend:

Rising Inclination Towards High-Performance Engine Oils to Support Market Growth– In recent years, there have been advancements in engine technology owing to which the requirement for higher-grade engine oils, including synthetic and semi-synthetic oils has substantially increased. Moreover, these high-performance lubricants offer better protection and efficiency. As a result, consumers are increasingly opting for these oils to protect two-wheelers from wear & tear. Moreover, the benefits of high-performance and synthetic oils over traditional mineral oils make them more suitable, especially in the region's hot and humid conditions. Along with this, these motor oils provide better engine protection, improved fuel efficiency, and better mileage. Therefore, customers seeking more functional benefits are increasingly purchasing these lubricants, enlarging market growth. Further, the new two-wheelers are made using modern engine designs that require engine oils to meet efficiency and environmental standards. Thus, top companies are focusing on developing products that not only enhance engine performance but also reduce environmental impact. For instance,

• In 2023, Shell Lubricants and Ducati Corse collaboratively launched a new motorcycle oil specifically designed for the latest Ducati Panigale V4 R motorcycle with a dry clutch.

This increasing introduction of eco-friendly and high-quality lubricants will continue to gain the attention of environment-conscious customers and two-wheeler manufacturers, uplifting market growth.

Southeast Asia Two Wheeler Engine Oil Market (2024-30): Segmentation Analysis

The Southeast Asia Two Wheeler Engine Oil Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2024–2030 at the regional levels. Based on the analysis, the market has been further classified as:

Based on Product Type:

• Synthetic Oil
• Semi-Synthetic Oil
• Mineral Oil

Of them all, Synthetic oil held a significant market share due to its superior performance, environmental benefits, and cost-effectiveness. This type of oil has a longer lifespan than conventional oil. Along with this, synthetic oil makes the engine less prone to oxidation and is more stable than conventional oil. Therefore, the customers concerned about engine wear & tear tend to go for this type of oil. Further, due to the presence of additives and uniform molecular structure, it does not let tiny unwanted bits accumulate and create deposits, thereby ensuring the smooth functioning of the engine.

Further, at both low & high temperatures, synthetic oils enjoy better viscosity and stability than conventional oil or synthetic blends. These oils flow quickly in winter temperatures as well as resist extreme heat, allowing your engine to run smoothly year-round. Thus, customers who are concerned about the functioning of their vehicle's engine in the extreme temperature of the SEA region prefer synthetic oil, supporting market growth.

Based on Demand Type:

• OEM
• Aftermarket

Among them, the aftermarket holds a dominant market share owing to an extensive network of service centers, garages, and retail outlets and the availability of dealers and distributors. The prevalence of these service centers across the region helps ensure that engine oil products are readily accessible to consumers. This widespread availability of products & services is crucial for Southeast Asian countries, especially the ones with a vast and diverse geography, including densely populated urban areas and remote rural regions.

Moreover, the aftermarket service network in SEA is supported by the region's robust transportation infrastructure, which has improved significantly in recent years. This infrastructure facilitates the efficient distribution of engine oil and other automotive products from manufacturers and distributors to retailers and service centers across the region. The accessibility of engine oil through this extensive network also promotes regular vehicle maintenance among consumers. Moreover, easy access to engine oil and related services encourages more frequent oil changes and maintenance checks, which in turn contributes to the longevity and performance of two-wheelers. This culture of regular maintenance is helping sustain the demand for engine oil and supports the overall market growth.

Southeast Asia Two Wheeler Engine Oil Market (2024-30): Country Projection

Geographically, the Southeast Asia Two Wheeler Engine Oil Market expands across:

• Indonesia
• Thailand
• Malaysia
• Singapore
• Philippines
• Vietnam
• Rest of Southeast Asia

Geographically, Indonesia holds a substantial market share due to several factors such as rising production & sales of motorcycles & two-wheelers and increasing consumer awareness regarding the maintenance of two-wheelers to avoid any road accidents. Indonesia has one of the world's largest populations and a considerable proportion of individuals rely on motorcycles as their primary means of transportation. Moreover, the country faces an issue of traffic congestion problem. As a result, the individuals prefer to use motorcycles & mopeds rather than cars. The excessive utilization of bikes & scooters reduces the engine oil levels, causing loss of power and reducing friction. Therefore, the owners ensure that their vehicles undergo regular maintenance after completing 3,000 miles or every six months, which positively contributes to market growth.

Further, the nation is home to several large motorcycle companies, including Astra Honda Motor, PT Yamaha Indonesia Motor Manufacturing, etc., which produce scooters & bikes for both the domestic as well as export markets. This local production within the country accentuates the lubricants' demand, supporting market growth.

Southeast Asia Two Wheeler Engine Oil Recent Development:

• 2024: Shell Indonesia: Announced its plan to build its first grease manufacturing plant (GMP) in Indonesia. The plant is a new version of Shell’s existing Marunda Lubricants Oil Blending Plant (LOBP) in Bekasi, Indonesia.
• 2023: Motul: Launched two new products for Kawasaki motorbikes in Indonesia during the round of the World Superbike Championship.