INVC NEWS
Market Overview
The industry is at the growth stage, with the increasing demand for automotive lubricants due to increasing automotive sales. The industry is import driven as both the end product and raw materials are majorly imported from other countries. The prices have been continually increasing with increasing the price of base oil. Over the review period, the Malaysia lubricant market observed healthy growth both in terms of revenues as well as sales volume.
Segmentation by Grade (Synthetic, Semi-Synthetic, and Mineral)
Mineral lubricants have dominated the industry ever since its existence, however high performance and expensive synthetic and semi-synthetic lubricants are gaining the pace with increasing marketing efforts by lubricant manufacturers and increasing sales margins of synthetic lubricant to mechanics by distributors as well as manufacturers. With the increasing use of synthetic lubricants, the average per annum requirement of lubricant is falling but the higher prices of synthetic lubricants lead to increasing market revenue.
Demand By Type (Passenger Car Engine Oil, Heavy-Duty Engine Oil, Motorcycle Engine Oil, Hydraulic Oil, Gear Oil & Transmission Oil and Greases)
In 2019, Passenger Car Engine Oil accounted for the leading share in the automotive lubricant sales followed by Heavy Duty Engine Oil, Motorcycle Engine Oil and others. An increasing number of passenger cars, high lubricant volume utilization in commercial vehicles and increasing distance traveled ensured the dominance of Passenger Car Engine Oil and Heavy-Duty Diesel Engine Oil. Large circulation of motorcycles catapulted the share of motorcycle oil to the third-highest in the market.
By End Users
Passenger Vehicles are the biggest consumers of automotive lubricants in Malaysia due to increasing private vehicle ownership because of high per capita income and the unreliable public transport system in the country. Increasing average distance traveled by trucks catapulted the share of commercial vehicles to the second highest in the market.
By Sales Channel
Majority of sales were undertaken through distributors followed by direct sales to OEMs and through company-owned fuel stations. By distributors, maximum sales were attributed to service stations and garages due to the high influence of mechanics in lubricant purchases. The share of supermarkets and online retail is low due to the low trust level attributed and the relatively new status of these modes of distribution.
Competitive Landscape
The industry is concentrated with the presence of around 15-25 manufacturers including multinational oil producers and local manufacturers. The industry is majorly dominated by three major players namely Castrol, Shell, and Petronas accounting for a market share of +70% collectively in terms of sales volume in 2019.
Future Outlook and Projection
The industry is expected to experience a major downfall in 2020 due to coronavirus pandemic, but it is expected to gain the pace and recover the loss by 2024. Semi-Synthetic and Synthetic grades are expected to gain prominence and favor owing to demand superior quality and increasing lubricant quality standard awareness among consumers. The introduction of the electric vehicle will dampen the demand for traditional engine oil but will drive sales of E-lubricants. Market consolidation will take place as the automotive lubricant industry is a niche space and players with better geographical presence will take over others.
