The Southeast Asia (SEA) lubricant market is primarily dominated by automotive lubricants, which contribute to a significant 60% of the total market share. This market encompasses a diverse range of specialized products such as engine oils, transmission fluids, and gear oils, tailored to meet the unique requirements of both automotive and industrial applications.
The emerging economies in SEA are propelling the demand for lubricants across key industries. Major manufacturing sectors, particularly in labor-intensive industries like automotive, electronics, and food processing, require substantial quantities of lubricants to ensure the smooth operation of machinery. Additionally, upscaling in the manufacturing, construction, automotive, and marine industries further fuels the demand for lubricants. Infrastructure projects such as roads, bridges, and airports also contribute to the need for a reliable supply of lubricants.
The current market size of lubricants in SEA stands at USD 15 billion in 2022, with expectations to reach USD 17.4 billion by 2030.
1. Continued Oil Demand: The next few years are expected to see sustained demand for semi-synthetic and fully-synthetic oils, driven by the industrial and automotive sectors. However, the anticipated rise in prices for automotive and industrial lubricants may pose challenges to both vehicle and lubricant sales.
2. E-commerce Penetration: Strengthening distribution networks across SEA, driven by the rise of e-commerce, provides more channels for lubricant sales. Indonesia leads in e-commerce market volumes, followed by Thailand, the Philippines, and Malaysia.
3. Sustainable Lubricants: A key trend on the horizon is the shift towards sustainable lubricants. As environmental sustainability gains prominence, lubricant manufacturers are investing in research and development to offer eco-friendly alternatives. While adoption may be slow in lower GDP per capita SEA countries, the trend in bio-lubricants and lubricants with reduced fuel consumption is expected to grow.
The automotive lubricant sector in SEA is robust, with a market size of USD 9 billion in 2022, projected to reach USD 11.4 billion by 2030.
1. Government Policies Impact: Removal of import taxes for cars imported from the ASEAN region has positively impacted the automotive lubricant market. Reduced new car prices have led to increased car sales, contributing to the demand for lubricants.
2. Growing EV Market Challenge: The rising adoption of Electric Vehicles (EVs) in countries like Singapore and Thailand poses a challenge for lubricant companies. Adaptation of product offerings and strategies is crucial to cater to the evolving needs of EVs.
1. Commercial Vehicles Demand: The demand for specialized lubricants for commercial vehicles, particularly trucks, buses, and agricultural equipment, is high. This is driven by Indonesia's thriving transportation sector and Vietnam's growing agricultural industry.
2. Preference for Synthetic Lubricants: As emerging economies improve, there is an expected shift towards synthetic lubricants. Consumers in countries like Indonesia, the Philippines, and Vietnam are becoming more aware of the long-term cost benefits and superior engine protection offered by high-quality synthetic lubricants.
3. Retail Channel Dominance: Retail shops, service centers, and gas stations are anticipated to remain the most popular distribution channels for automotive lubricant sales in most SEA countries.
Source: https://ycpsolidiance.com/white-paper/SEA-automotive-lubricants
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