Increasing two-wheeler ownership is a trend not just in India but across Asia, home of 82 percent of the worlds 750 million motorcycles, scooters and mopeds, Chawla said. Throughout the region, these vehicles are considered an economical, reliable and practical means of personal mobility, and economic development has put them within reach of many. Global two-wheeler ownership is projected to hit 1.14 million by 2020, and Asias share of that number to rise to 86 percent.

Sales of new two-wheelers in India currently amount of 16 million per year, second only to China. But the rate of growth is faster in India, and demographics suggest it should catch China by around 2030. Chinas labor force is now decreasing 1.1 percent per year, while Indias is expanding at 31 percent per year. Indias labor force should surpass Chinas in about a decade and continue growing for 25 years after that.

Eighty percent of Indias population is of working age, and 54 percent is 25 years old or younger, Chawla said. There is great and growing demand for personal mobility, especially since public transportation in India is so poorly developed.

There is every chance that India becomes the largest two-wheeler market in the world, Chawla said.

Growth potential in India is particularly high in rural areas because two-wheeler penetration there is so low today, Chawla said. Forty-six percent of sales were in urban areas in rural areas in 2013-14, but that portion should increase to 62 percent by 2018-19.

The key market players in the Indian two wheeler market include Hero Moto Corp., Bajaj Auto, TVS Motors, Honda, Mahindra & Mahindra, Yamaha, Suzuki and others. Motorcycles currently account for 67 percent of sales of new two-wheelers, compared to 28 percent for scooters and 5 percent for mopeds, according to Chawla. Motorcycle demand is still growing – an average of 9.5 percent over the past seven years – but scooters sales are growing faster, an average of 22.5 percent over the same period. At those paces, scooters should account for 45 percent to 50 percent of new sales by 2020.

This has significant implications for oil marketers since the lubrication needs of scooters differ from motorcycles. As Chawla noted, engine oils in motorcycles lubricate the machines gears and a wet clutch, along with the engine. The clutch operates by friction, meaning the fluid needs precise friction characteristics. Scooters have continuously variable transmissions controlled by a dry chain and do not have a clutch, so the oil only lubricates the engine and can be formulated with a greater focus on fuel economy. As a result, scooter oils use lower-viscosity base oils and do not require friction modifiers used in motorcycle oils.

Oils used in motorcycles if used in scooters will compromise fuel economy and durability, Chawla said. Additionally, scooter engines run hotter than motorcycles due to poor air draft. This requires better oxidation stability.

India consumes approximately 200 million liters per year of two-wheeler lubricants, Chawla estimated, adding that the key product segments include motorcycle oils, scooter engine oils and engine oils for two-stroke engine oils.

Currently, in the engine oils category, API SJ engine oil represents the largest category in terms of consumption. He added, However, due to increasing penetration of high-performance oils, it is bound to lose its market share to API SM, SN, and SL specification oils. API SM, SN specification oils which currently represents 9 percent of the two-wheeler engine oil market, are projected to increase their market share to 25 percent by 2020.

Bazaar sales and independent workshops together represent the largest sales channel for motor cycle oils. They account for a combined share of approximately 70 percent. Factory fill accounts for approximately 9 percent of the total consumption. Service centers authorized by original equipment manufacturers prefer using genuine oils recommended by the OEMs. Most OEMs now recommend JASO MB type engine oil for scooters.

But oil recommendations vary depending on model and manufacturer. Hero Moto Corp. which is the largest two-wheeler OEM in the country, recommends API SJ 10W-30 engine oils manufactured by Savita Oil Technologies Ltd., Bharat Petroleum Corp. Ltd., and Tide Water Oil Co. Ltd. Honda recommends JASO MA 10W-30 for motorcycles and JASO MB 10W-30 for scooters. Bajaj recommends 20W-40 and 20W-50 grade engine oils for use in their motorcycles and scooters.

TVS recommends 10W-30 grade engine oils. The largest high-end two-wheeler OEM, Royal Enfield, recommends 15W-50 grade oils in their vehicles. Other high-end two-wheeler OEMs, such as Harley Davidson, Kawasaki, KTM, and Triumph, recommend 10W-50 grade fully synthetic or semi-synthetic oils in their motorcycles.