Forecasts Clash on Americas Auto Lubes


Forecasts Clash on Americas Auto Lubes
Many original equipment manufacturers are recommending synthetic lubricants in an effort to reduce vehicle emissions and improve fuel economy. © sshaw75 / iStock

The Freedonia Group and Kline and Co. agree about the biggest factors that will affect automotive lubricant markets in the Americas in coming years, but they disagree about the impact those factors will have. Freedonia forecasts that consumption will decrease from 6.35 million tons in 2016 to 6.3 million tons in 2021, while Kline predicts an increase from 6.7 million tons in 2017 to 6.9 million tons in 2021.

Cleveland-based Freedonia published a study, Global Automotive Lubricants, two weeks ago and provided a breakdown of its forecast for the Western Hemisphere during a follow-up interview. Kline, which is headquartered in Parsippany, New Jersey, shared its predictions for the Americas in response to questions from a reporter.

Get alerts when new Sustainability Blog articles are available.


The firms agree about the trends and other factors that will most effect automotive lubricant demand through 2021: growing sales of new vehicles, increased use of synthetic lubricants; and tightening fuel economy standards. They have differing thoughts, however, about the combined impacts of those factors. Neither group disclosed enough about their methods to show if their conclusions diverged because of assumptions or methods of calculating – or both.

The primary driver of demand growth in the Americas is the expansion of the vehicle fleet, particularly in developing economies such as Mexico and Brazil. Increasing commercial activity, as well as expanding agricultural, construction and mining sectors, will also support growth, Freedonia Media Relations Director Corinne Gangloff said.

“New commercial vehicle sales in Central and South America will boost demand for 15W-40 heavy-duty motor oils and products meeting current API service categories, benefiting suppliers of quality products,” said George Morvey, project manager at Kline’s Energy Practice. “High demand for motorcycles in countries like Colombia has increased demand for four-stroke engine oils and may also drive demand for synthetics and lower viscosity grades while benefiting lubricant manufacturers with close factory fill ties to original equipment manufacturers.”

In the U.S., new consumer vehicle sales translate into increased factory- and service-fill demand for low viscosity grade products, including 0Ws and 5Ws. At the trade class level, new car dealerships and quick lubes get the most benefit from new vehicle sales, said Morvey.

The Freedonia Group also stressed the importance of increasingly stringent fuel economy standards, which are encouraging original equipment manufacturers to recommend low-viscosity synthetics for new vehicles. This trend is most prevalent in large countries, such as the U.S. and Canada, but is seeping into developing countries, such as Brazil and Mexico.

For a consumer vehicle original equipment manufacturer, using a full synthetic for factory- and service-fill applications supports their efforts to reduce vehicle emissions and improve fuel economy. Also, a synthetic will support an original equipment manufacturers goals of extending oil drain intervals, Morvey stated.

“Regulatory efforts in the U.S. and Canada to boost fuel efficiency will continue to drive the adoption of synthetic lubricants,” Gangloff noted. This will help cause drain intervals to lengthen and hold down lubricant demand growth in the region overall.

Morvey suggested that readers of Kline’s study should not focus too much on top line numbers. We press with our clients not to get caught up in growth rates at these high levels, but watch the trends below the surface, he stressed.

Changes in consumer behavior may shift demand from consumer to commercial. More online purchases and deliveries from carriers such as the U.S. Postal Service, UPS and FedEx means less personal vehicle usage or trips, Morvey said.

The region may experience a short-term boost in lubricant demand due to weather conditions. I would argue that the devastation from recent storms and hurricanes in the Caribbean will have a positive impact on lubricant demand due to rebuilding and construction activity, although this will be short-term and not sustainable, he added.

Brazil, the United States, Mexico, Canada and Argentina are the region’s five largest lubricant markets, accounting for 90 percent of hemispheric consumption, according to Kline. Through 2021 Kline anticipates Brazil to grow at a compound annual rate of 3 percent, Mexico at 1.3 percent, and Argentina at 1.2 percent. Canada is expected to shrink at a compound annual rate of 1 percent through 2021, and the U.S. is not expected to experience any volumetric growth.

Freedonia estimates that Shell is the leading automotive lubricant supplier in North America and that BP, which markets under the BP and Castrol brands, is the market leader in Central and South America.

Kline did not share its own estimates of regional market leaders but did acknowledge that those two companies are among the top suppliers for the hemisphere, along with ExxonMobil, Chevron and Valvoline. Morvey did say base stock trends make it easier for other companies to try to carve their own market shares. “The availability of [API] Group II, II+, III, III+ [and] IV base stocks means more suppliers can enter the space, which is a challenge for leading suppliers like Shell and BP,” he said.

Related Topics

Automotive Lubricants    Business    Finished Lubricants    North America    Region    South America    U.S.A.