Thai Market Primed to Grow Again

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Thailand’s lubricant market shrank slightly in 2014 but is poised to resume growing thanks to continued expansion of its auto manufacturing industry, Kline & Co. consultants said.

During a Sept. 8 webinar, the U.S.-based consulting firm did not show a precise change from 2013 for the worlds 13th-largest lube market, but it did indicate a small contraction. George Morvey, industry liason for Klines Energy Practice, also predicted that the Thai market – which consumed 687,000 metric tons of lubes last year – will return to its previous growth pattern for the next several years.

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We expect the country to get those issues in check and resume a growth trajectory, he said.

The company did offer specific data and projections for several of the markets major segments. It estimated passenger car motor oil demand in Thailand will grow about 1.8 percent per year, from 150,000 tons in 2014, to 164,000 tons in 2019. Theres a significant amount of motor cycle oil consumption in that country, as you would expect, with a high population of two- and three-wheelers, Morvey remarked.

Thailands heavy-duty motor oil demand will grow about 2.4 percent per year from 105,000 tons in 2014 to 118,000 tons in 2019, the company forecasted. The share of that segment that is 15W-40 is expected to rise to near 40 percent. The portion of the market belonging to monograde oils will decrease but remain significant at nearly 30 percent, Morvey said.

Thats probably very reflective of the vehicle park in that country, he said. If youre not a player in that monograde business, about 30 percent of that market is really unaddressableto you.

Overall penetration of synthetic and semi-synthetic lubes remains well under 50 percent, but those categories account for a strikingly high portion of the passenger car motor oil segment – around 90 percent in 2014, Morvey said, adding that their share will approach 100 percent by 2019. The popularity of synthetics and semi-synthetics stems from the large size of the countrys auto manufacturing base.

Ive heard it referred to as the Detroit of Asia, Morvey said. Like in Mexico, a lot of that synthetic demand in the consumer segment is more factory fill rather than service fill. Thailand, like Mexico, is a big exporter of vehicles.

On the consumer automotive lubricants side, Kline found Thailand primarily an installed or do-it-for-me market. Most folks go to independent workshops, followed by franchise workshops, Morvey said. Independent workshops accounted for almost 40 percent of the market, and franchise workshops for close to 25 percent. The quick lube segment made up about 20 percent of the installer market, with other types of retail installers accounting for the rest.

Supplier market share in Thailands total lubricants market (including all types), was led by national oil company PTTs 20 percent and Shells 15 percent. Following were BP (8 percent), ExxonMobil and Idemitsu at 6 percent each, Thai company Siam Pan Group and Chevron at 5 percent apiece, Thai company Bangchak Petroleum at 4 percent, Thai Petroleum & Trading with 3 percent and Valvoline at 2 percent. Other suppliers accounted for the remaining 26 percent of the countrys market.

Top estimated suppliers in Thailand for consumer use in 2014 included PTT with 22 percent, Shell at 13 percent, Idemitsu at 9 percent, Siam Pan Group with 8 percent and ExxonMobil at 7 percent. The list was rounded out by BP (5 percent), Bangchak and Valvoline with 3 percent apiece, and Chevron and Thai Petroleum & Trading with 2 percent each. Other suppliers accounted for the remaining 25 percent.

For industrial lubricant suppliers in Thailand, Shell (17 percent) topped the list, followed by PTT (16 percent), BP (9 percent), ExxonMobil (6 percent), Chevron and Bangchak with 5 percent apiece, Idemitsu (3 percent) and Siam Pan Group and Valvoline at 1 percent each. Other suppliers accounted for the remaining 37 percent.

On the commercial vehicle lubricants side, PTT led with 23 percent, followed by Shell at 17 percent, BP and Thai Petroleum & Trading at 11 percent each, Chevron (9 percent), Siam Pan Group (7 percent), ExxonMobil (5 percent), Idemitsu and Bangchak at 4 percent apiece, and Valvoline (2 percent). Others accounted for the remaining 7 percent.

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Business    Region    Southeast Asia    Thailand