Across the world, lubricant oil is primarily used in automobile engines, marine engines and for industrial purposes. Globally, more than 50% of the total lubricant volume is being used for automobile, around 40% is for industrial purpose and rest is for marine and other applications.
In the coming days, global demand of lubricant will remain stagnated or grow at a very low rate due to reasons like Low emission norms for industries and automobile sector, Advancement in engine oil technology, Use of high performance oil, and Saturation in automobile sector for developed countries. Currently, USA is the largest consumer of lubricant oil across the world. China and India comes at second and third position respectively.
The consumption pattern in Indian lubricant oil industry is similar to world lube industry. Majority of lubricant is being consumed by automobile sector (55%); rest is being used for Industrial purpose and marine industry.
Major PSU players of the Indian lubricant oil industry are IOCL - Servo, BPCL-MAK, HPCL-Turbo. These three players approximately hold 50% of the market share in Indian lubricant industry.
In 1993, lubricant industry in India got liberalized, which attracted the private players to enter into the Indian lube market. Before liberalization auto lube oil in India was sold mainly through petrol flling stations. Decline in margin due to rising base oil (main raw material for lubricating oil production) prices, increasing competition due to large number of private players, very low consumer awareness about the brands and quality and too much price sensitivity has led Indian lube oil industry to a major marketing challenge for the companies involved with it.
Distributors are the important channel partner for sales of any product. Robustness of distributor plays a major role. In case of lubricant oils there are few important roles of a distributor like Market Information, Buying and Assortment Building, Selling and promotion, Customer Relations, Risk Bearing, Branding, Financing, and Warehousing & Transporting Management of Distributors Sales Representative.
Company which is able to come up with good promotional offer for their dealers and mechanics wins the battle. Some of the major problems faced overall in the market are Delivery time from distributor to dealer, tracking of the scheme issued to dealers or mechanics, proper use of branding materials.
In India, a product can‘t be placed in the market on the basis of brand only, but it should match the spending power of customers. An industry where switching cost is negligible, person relationship plays an important role to capture maximum market share. Regular schemes have become part of the lube market. Not only the product, but also the superior service differentiates one company from another. An effcient distribution channel as well as hard working sales team drives a company on front foot.
I would like to thank you for the heartening response to our last edition’s cover story –“Get Back to the Basics of Lubrication to Prevent Machine Failures” and other articles. Our current issue’s cover story is on “How to Evaluate a New Lubricant”. This will help the readers to change from a culture of over lubrication to bestpractice lubrication through sharing of knowledge and application of predictive maintenance technologies.
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