All eyes are on Asia Pacific as the region continues to prosper. Rapid urbanisation coupled with a rise in affluence and economic stability have put Asian markets on the world map. The region now boasts some of the world’s fastest growing economies, and is quickly becoming a hub for many industries as well – including the lubricant market.
According to this article from Fuels & Lubes, Asia Pacific (including the Middle East & Africa) now accounts for 54% of global lubricant demand, compared with 45% in 2007. This was attributed to the rapid pace of industrialisation, motorisation, and higher consumption in the region. Conversely, America’s and Europe’s shares of the pie shrank by 5% and 4% respectively.
This is a key reason why the entire lubricant value chain has been moving towards Asia Pacific.
A growing middle class has spawned demand for consumer items, particularly automobiles, across the region and especially so in China and India. Over the next 15 years, lubricant demand in China is expected to increase by 15-20%. This is in comparison to mature markets in the United States and Europe, which will suffer big declines of 20% and 10% respectively during the same period.
Meanwhile, in India, the automobile sector is largely responsible for the country’s lubricant market – considered the third largest in the world. Domestic auto sales rose 12.7% to 26.8 million units in 2018, and exports rose 20% to 4.6 million units. Altogether, the industry has contributed 7% to the country’s GDP.
All of these have attracted transnational business corporations to shift their product marketing efforts beyond their traditional markets to the Asia Pacific region. Meanwhile, domestic companies in the region are also actively expanding their operations to ride the growing lubricant demand.
Which markets do you think will see huge growth in 2019 and 2020? In what ways can the lubes sector help your business and your customers’ ride the positive growth momentum?
Happy to hear your thoughts below!
I think the automotive sector and Power Generation will grow the most and in parallel, with a higher demand for lubricant; we should take advantage of this growth to sell our synthetic oils of the Mobil brand. Kind regards, Daena Tan.