LATAM Automotive Lubricants Market is forecast to reach $5.97 billion by 2025, after growing at a CAGR of 2.6% during 2020-2025. Growing demand for lightweight and high-performance vehicles in LATAM along with increasing disposable income is expected to be a key factor driving the LATAM automotive lubricants market growth during the forecast period.
The report: “LATAM Automotive Lubricants Market – Forecast (2020-2025)”, by IndustryARC, covers an in-depth analysis of the following segments of the LATAM Automotive Lubricants Market.
- Engine oil segment holds major share of the LATAM automobile lubricants due to growing production of vehicles across the globe and rising consumer awareness regarding the use of oil.
- The LATAM automotive lubricants market is growing due to increasing demand for brake fluids, engine oils and transmission fluids among both consumer and commercial automobiles.
- Shift in trend towards green derivatives is also expected to drive the market over the forecast period.
By Product - Segment Analysis
Engine Oil segment holds the largest share in LATAM automotive lubricants market in 2019, up to XX%. Engine oils are widely used to lubricate internal combustion engines and are generally composed of 75-90% base oils and 10-25% additives. They are typically used for applications, such as corrosion protection, wear reduction and smooth operation of engine internals. They function by creating a thin film between the moving parts for enhancing the transfer of heat and reducing tension during the contact of parts. High-mileage engine oils are in demand lately, owing to the properties that help in the prevention of oil leaks and the reduction of oil consumption. The growing urban population in developing countries and the increasing average age of passenger cars are the major factors expected to drive the market for engine oils.
By Base Oil - Segment Analysis
Mineral Oil segment held a significant share of the LATAM automobile lubricants market in 2019. A wide variety of additives are incorporated into most lubricants. These include corrosion inhibitors, antioxidants, friction modifiers, viscosity index improvers, and anti-wear additives. Lubricants are manufactured through base oil and additives which are derived from petroleum sources such as shale oil, crude oil and CBM. These are further refined to produce mineral oils such as naphthenic oils, paraffinic oils and aromatic oils. These oils in combination with additives give lubricants that find applications in automotive. Lubricating oils used in environments in which the oil is subject to mechanical agitation in the presence of a gas entrap the gas in the form of small gas bubbles in the oil and as foam. Therefore, an anti-foaming agent is added to lubricating oils used in such environments to reduce the foaming and air entrainment
By Vehicle Type - Segment Analysis
Passenger vehicles segment held a significant share of the LATAM automobile lubricants market in 2019. The large share of this segment is mainly attributed due to the presence of a large number of on-road passenger cars, growing production and ownership of passenger and general utility vehicles, and high awareness regarding maintenance and use of lubricants among car owners. According to OICA, the sales of passenger cars in Central and South America increased from 3,146,431 million in 2016 to 3,795,557 million in 2018. On the other hand, a light-weight commercial vehicle is projected to grow at the fastest CAGR during the forecast period due to growing need for transportation of goods and services and people; and growing penetration of light-weight commercial vehicles in rural and semi-urban areas. According to OICA, the sales of commercial vehicles in Central and South America increased from 754,450 million in 2017 to 808,881million in 2018.
Geography - Segment Analysis
Brazil dominated the LATAM automotive lubricant market with a share of more than 40% during the forecast period. Brazil automotive industry is anticipated to witness high growth rate over the forecast period owing to rapid mega construction projects and economic development. The vehicle production in Brazil increased by 5.2% in 2018 compared to the previous year. Also, according to the International Association of Oil & Gas Producers (IOGP), Brazil’s daily output of 2.6 million barrels of crude oil in 2016 gave it a 35% regional share, making it, South America’s largest producer of crude oil.
Drivers – LATAM Automotive Lubricants Market
- Increasing need for transportation
The growing demand for vehicles across the world will be a direct growth factor for accessory industries for automotive, which includes automotive lubricants as well. An increasingneed for individualized transportation options and rising per capita income has driven the sale of cars in several countries. OEMs are thus ramping up their production capabilities in order to meet growing regional and export demand. The strong OEM recommendations to use high-grade lubricants in their cars will result in a higher number of vehicles to perform well while using specified automotive lubricants. According to OICA, the production of vehicles in South America increased by 4% in 2018 compared to the previous year. Hence, increasing production of vehicles due to the increasing need for transportation is expected to drive the LATAM automotive lubricants market.
Challenges – LATAM Automotive Lubricants Market
- Crunch in raw material supply
With depleting crude oil reserves, the market has witnessed a crunch in raw material supply. According to International Association of Oil & Gas Producers (IOGP), Venezuela’s daily output of crude oil was 3.3 million barrels. By 2016 it was down to 2.4 million barrels per day. Hence, major oil companies have started to focus on developing new refining techniques, and sources to overcome this obstacle.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the LATAM automotive lubricants market. In 2019, the market of LATAM automotive lubricants market has been consolidated by the top five players accounting for xx% of the LATAM automotive lubricants market share. Major top 10 companies of LATAM automotive lubricants market are Shell International B.V., Exxon Mobil Corporation, FUCHS PETROLUB SE, Motul, Phillips 66 Company, Repsol S.A., SK lubricants Co., Ltd., Klüber Lubrication München SE & Co. KG, Amsoil Inc., Petróleo Brasileiro S.A., Valvoline, Inc., JXTG Nippon Oil & Energy Corporation, Chevron Corporation, and BP P.L.C. (CASTROL) among others.
- In October 2019, FUCHS acquired high-performance specialty synthetic lubricant manufacturer Nye Lubricants Inc. With this acquisition, Fuchs expanded its specialty lubricants product portfolio.
- In July 2018, Repsol SA has agreed to acquire a 40% stake at Mexican lubricants firm Bardahl De México S.A. De C.V., which would allow it to manufacture and sell its lubricants in the country