Castrol: Shifts Global Motorcycle Products Development Center to India

Industrial and auto lubricant maker Castrol has shifted its global motorcycle products development center from the United Kingdom to India. Castrol India's automotive director and chief operating officer Ravi Kirpalani said, “India is the biggest market for two-wheelers, and hence it was only logical for us to shift the center here". Kirpalani said it was important for the company to base its research center close to the products’ biggest markets.

”The motorcycle is an Asian story, and India is the largest market for these products,” he remarked.

Kirpalani said, Castrol which has a 26-percent market share in terms of value in India, is confident about the long-term potential of the country in spite of a sluggish economy and an unstable political climate. The current size of the lubricant market is about 1.5 billion litres. Reduction in profitability during the last few quarters is because of the volatility of the rupee. Kirpalani pointed out that the price of raw materials such as base oils, which are fully imported, shot up by 25 percent on account of currency fluctuations.

“Therefore, margins may continue to be under pressure for some more time. However, over time, the demand is expected to slacken which will result in softening of the crude oil", he said. BP (earlier known as British Petroleum) holds about a 71-percent stake in Castrol India, which is a listed entity on Indian stock exchanges. This year, Castrol raised prices of its products by 5 to 6 percent and would only look at another increase depending on how the market performs, but “we could do it in a measured way,” Kirpalani said.

Better technology has ensured that oil replacement for vehicles is not as frequent it was previously. "Therefore, it is both a challenge as well as an opportunity for us to tackle newer situations arising out of the use of better technology”, he added