Esso (Thailand) Public Co.’s lubricant sales fell 5.7 percent last year, in line with a decline in the country’s sales of motor vehicles and motorcycles.
Lubricant sales revenue for 2019 fell to 2.8 billion baht (U.S. $86 million). According to data from the Asean Automotive Federation, sales of motor vehicles and motorcycles last year fell 4 percent and 3 percent, respectively.
The slowdown may continue as “the Thai light vehicles market got off to a weak start in January and fell 8 percent year-over-year, marking the eighth consecutive month of decline. The Covid‐19 outbreak will only serve to aggravate the downturn,” global business consultancy LMC Automotive said in its latest February report.
“Banks tightened auto loan conditions, due to concerns over high levels of household debt. Other factors affecting consumer purchasing power, such as severe drought, mean that the economy is likely to continue to decelerate. This comes against a backdrop of escalating political turmoil, which will exert pressure on the current government to perform,” LMC added.
The company said in its 2019 financial report that, “we also took steps to invest in the business and improve our competitive position in Thailand. We increased the net number of Esso-branded service stations by 30 upgraded sites.” The company has 1,641 service stations, including 23 stations with quick lube change services.
Krungsri Research, a member of Japan’s Mitsubishi UFJ financial group, revised Thailand’s 2020 gross domestic product growth forecast from 1.5 percent to -0.8 percent last month.
Esso Thailand manufactures and markets petroleum and petrochemical products under the Esso and Mobil brand names. An ExxonMobil affiliate, the company recorded a net loss of 3.1 billion baht for 2019, compared to the previous year’s net profit of 2.2 billion baht, due to refinery margins dropping to below historical levels and a slowing global economy.