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Rising Need from Automotive Industry Boosting Demand for Synthetic and Bio-Based Lubricants, says TMR

Posted on Aug 29, 2016

The global synthetic and bio-based lubricants market is led by large MNCs with wide distribution networks. Key players in the market are Shell, ExxonMobil, BP, Castrol, Chevron, and Fuchs. The top three players accounted for 34.5% of the market in 2011. Players are focused in reducing product pricing in order to capture market share. Product innovation is thus a key strategy adopted by players. Companies are also striving to achieve cost effective synthetic and bio-based lubricants by aggressively investing in R&D activities. Brand creation and awareness stand as the foremost challenge in the industry, states a new report by Transparency Market Research (TMR).  Thus, the degree of competition is high. 

The threat of new entrants is expected to be high despite the high degree of regulatory intervention and high capital investments required to survive in the market. This is because of the readily available renewable raw materials. Moreover, the eco-friendly nature of bio-based lubricants is also attracting many new entrants.

Rising Demand for Vehicles Spells Growth in Lubricant Consumption

Lubricants are widely used in the internal combustion engines for reducing the heat of friction and improving the life of the engine. As the demand for automobiles continue to rise owing to rising disposable income, the need for synthetic and bio-based lubricants is also growing across the globe. Bio-based lubricants help in the minimization of damage to the environment and are thus being increasingly preferred. These lubricants also enjoy regulatory support, which is further fueling their demand.

High Cost of Bio-based Lubricants Could Dent Demand

The high price of bio-based lubricants is one of the major factors restraining the growth of the market. Bio-based lubricants are 1.5 to 2 times costlier than conventional mineral oil-based lubricants, thus affecting their demand. Additionally, these products are majorly consumed in European and North American countries, whereas the production of vegetable oil is concentrated in Asian countries. This results in high importation of raw materials from Asian countries, resulting in price hike of these lubricants.

“The limited scope of bio-based lubricants is another factor dampening its demand,” states a TMR analyst. Vegetable oil lacks certain lubricating properties and also cannot be used for a wide range of applications. Volatility in the prices of oil is also a challenge faced by the market. Even so, focused research on mitigating these issues will aid the market’s growth in the long term.

Soybean and Palm Oil Emerge as Promising New Sources for Bio-based Lubricants

Different vegetable oils can be used in the production of bio-based lubricants. The markets for palm and soybean bio-based lubricants are expected to grow in terms of popularity, owing to their high performance and reasonable cost. Palm oil has benefits such as ability to be in liquid state even in cold weather and modest thermal oxidative stability. Soybean-based lubricants are suitable for extreme conditions, especially those involving high temperatures. Thus, soybean and palm oil are emerging as new and efficient sources of bio-based lubricants in the market.

According to the report, the global opportunity in the synthetic and bio-based lubricants market will rise from US$53.26 bn in 2015 to US$62.80 bn by 2018. By product, the industrial segment is expected to lead and account for 38.7% of the market by 2018 in terms of volume. By end user, the industrial segment is expected to lead and account for 50.3% of the market by 2018 in terms of volume. On the basis of application, the automotive oils segment is expected to lead in the global synthetic and bio-based lubricants market in the coming years, by volume. Asia Pacific is expected to lead and account for 43.6% of the global synthetic and bio-based lubricants market, in terms of volume by 2018.

This information is based on the findings of a report published by Transparency Market Research titled “Synthetic and Bio-Based Lubricants Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2012 - 2018.”

The global synthetic and bio-based lubricants market is segmented as follows:

Global Synthetic Lubricants market, Product type

  • Industrial
    • Process Oils
    • General Industrial Oils
    • Metal Working Fluids
    • Industrial Engine Oils
  • Commercial Automotive
    • Heavy-Duty Engine Oil
    • Hydraulic and Transmission Fluid
    • Gear Oil
    • Grease
  • Consumer Automotive
    • Passenger Vehicle Engine & Motor Oil
    • Automatic Transmission Fluid
    • Gear Oil
    • Grease
  • Global Bio-based Lubricants market, by product type
    • Vegetable Oils
    • Animal Oils
  • Global Bio-Based Lubricants market, by application
    • Automotive Oils
    • Hydraulic Oils
    • Process Oils
    • Demolding Oils
    • Lubricating Grease
    • Chainsaw Oils
    • Compressor Oils
    • Turbine Oils
    • Industrial Gear Oils
    • Metal Working Oils
  • Global Bio-Based Lubricants market, by end-user
    • Industrial Lubricants
    • Commercial Transportation Lubricants
    • Consumer Automotive Lubricants
  • Global Synthetic & Bio-Based Lubricants market, by geography
    • North America
    • Europe
    • Asia-Pacific
    • Rest of the World (RoW)

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