China's lubricants market witnessed a 10% annual growth rate

A recent report from Kline & Company highlighted that China's rapid economic expansion is driving an increase in both goods and people, leading to a surge in heavy vehicles such as trucks and buses. This trend is expected to create significant business opportunities for vendors of heavy-duty motor oils (HDMO). The consulting firm noted that the annual growth rate of China’s highway commercial vehicle lubricants market stands at 10%, and this momentum is projected to continue for the next five years. Additionally, the industry is witnessing a shift toward higher-quality HDMO products. Frans van Antwerpen, project manager at Klein Oil & Energy, explained, “Highway vehicles like buses and trucks make up roughly 46% of China’s total commercial lubricants market. With sustained economic growth, transportation demand is rising, resulting in more trucks and buses on the road—each requiring HDMO.” According to the Klein Research Report titled “Business Opportunities in China’s Lubricants Market 2004–2009,” current demand for road lubricants in commercial vehicles in China reaches 927,000 tons annually, with a total value of $1.1 billion. China’s second-quarter economic growth hit 11.3%, the fastest in a decade, which aligns with the increasing number of trucks and buses on the roads. However, Klein also pointed out that the types of vehicles and the lubricants they use are evolving. Li Wang, head of Klein’s Shanghai office, added, “Chinese buses are typically smaller than those in the U.S. or Europe and have traditionally run on gasoline. But to carry more passengers efficiently, they are being replaced by larger, diesel-powered buses. This shift is pushing the commercial highway sector to adopt HDMO for passenger car engines. Moreover, the Chinese government is focusing on improving fuel efficiency and reducing emissions, and higher-quality lubricants play a key role in achieving these goals.” Currently, state-owned oil companies dominate the commercial vehicle lubricants market. Sinopec leads with 32% of the market share, followed by PetroChina and Uni-President Petrochemical with 13% and 11%, respectively. However, Kline suggests that the growing demand for high-performance HDMO has placed multinational manufacturers in a strong position to supply the market. While domestic producers currently account for over two-thirds of the commercial oil market, they are not yet equipped to produce the advanced HDMOs required for newer commercial vehicles. Bill Downey, vice president of Kline’s oil and energy division, stated, “In the long term, Chinese manufacturers will likely ramp up production of high-performance HDMO. However, companies like BP, Shell, and ExxonMobil have extensive experience meeting these needs and have established partnerships with foreign original equipment manufacturers (OEMs) to provide lubricants used in their factories. These OEMs often specify the type of lubricant consumers should use, allowing global oil giants to maintain a competitive edge through strong relationships with them.” Before they can compete effectively with international players, Kline recommends that Chinese companies invest more in Type II base oils and diversify their product lines. The Kline report covers the entire Chinese lubricants market, noting that while the highway segment is growing rapidly, non-road commercial lubricants are expected to grow at a slower pace—around 4% annually. Although the construction industry is booming, the report explains that it will introduce more efficient, large-scale machinery, which may influence future lubricant demand.

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