Smooth Moves: The Rise of India’s Automotive Lubricants Sector

Considering the growing number of cars in India, it is no surprise that automotive lubricants have a strong position in the country’s dynamic market. Historically, India’s growth in the automotive lubricant sector has been positive even as demand in other countries and regions has declined. The year 2024 is significant because several factors such as technological advancements, sustainability and customer preferences are converging to transform the global automotive industry.

Let’s take a look at the current lubricants landscape in India, as well as upcoming trends and growth potential.

An overview of the Indian lubricants sector

India is one of the largest consumers of automotive lubricants, and the country’s finished lubricants market is the third largest in the world. One of the reasons for this is the constantly growing demand for passenger cars, resulting from the preference for passenger vehicles over public transport. According to a report by Moody’s, the Indian automotive industry recorded 27% growth in 2021 despite a significant decline in global vehicle demand, especially after the Covid-19 pandemic. According to a report by Mordor Intelligence, the Indian automotive lubricants market was 1.45 billion liters in 2021 and is expected to register a CAGR of 6.31% to reach 1.97 billion liters in 2026. In India, motorcycles accounted for 77.55 % of the total number of road vehicles in 2020, followed by passenger vehicles and commercial vehicles with shares of 16.84% and 5.61% respectively.

The automotive and industrial sectors primarily drive the demand for lubricants in the country. The Indian lubricants market was valued at USD 5.92 billion in 2022 and is expected to grow at a CAGR of 8.08%. This figure highlights the steady growth and integral role that lubricants play in the country’s diverse industries, a large part of which is the automotive sector.

Untapped market potential

With greater vehicle penetration in both rural and urban areas, the demand for lubricants will grow rapidly across all sectors, especially the automotive industry. Another encouraging sign of lubricant demand is the increased availability and adoption of used cars in the market. According to a report by Mordor Intelligence, the current valuation of used cars in India is $31.62 billion and is expected to increase to $63.87 billion by 2029. The average time to own a new vehicle has decreased significantly from six to three years. All luxury car manufacturers have their own used car sales companies, which is a good indicator of a thriving used car market.

Technological innovations

Technology in the lubricant sector is evolving at a rapid pace with advanced lubricant formulations that meet advanced application needs. They are designed to provide significantly improved properties such as improved wear protection, oxidation resistance and shear resistance in a variety of applications and environments. Compatibility with exhaust gas treatment devices is also an important factor. In the automotive industry, where operational efficiency and engine durability are critical, these features provide a compelling market advantage.

Improved performance and efficiency

With rising disposable incomes and an increasing number of high-performance cars in the country, the demand for high-quality and premium lubricants is increasing. Society has higher expectations of lubricants due to the needs of the latest, advanced engines in these modern cars. The move towards superior engine protection and improved performance requires advanced performance lubricants.

Ecological lubricants

Due to increased environmental awareness, businesses and consumers are showing an increasing preference for environmentally friendly lubricants. The drive towards more sustainable solutions in all areas of the business has led to more innovations in the lubricants sector. Long and ultra-long drain engine oils, especially in the commercial sector, have begun to gain popularity among end users who recognize the value and contribution of these oils to savings in their operations.

India leads the global automotive lubricants market and is projected to grow steadily due to several factors. Even in the face of the Covid-19 pandemic, continued demand for lubricants highlights the market’s resilience. With a rapidly growing economy, better infrastructure and widespread adoption of cars, it is clear that India is a key market in the global lubricants industry space and is showing clear signs of increasing importance in the coming years.

Colin Hodgson is Technical Support Manager, IMEA, Chevron International Products. The views expressed are those of the author.