Global demand for motorcycle oil is set to grow at a compound annual rate of 3.5 percent to almost 1.8 million metric tons by 2022, largely due to Asia-Pacifics healthy two-wheeler market, according to a Kline & Co. presentation last week.
In 2017 global demand for two-wheeler lubricants was between 1.4 million tons and 1.5 million tons, and Asia-Pacific accounted for 70 to 80 percent of that volume. South America is the next largest consumer, weighing in at less than 15 percent of the total. North America, Europe and a combination of Africa and the Middle East each had less than 5 percent of demand.
The Parsippany, New Jersey-based consultancy predicts the global two-wheeler population will jump to just over 800 million units over the next five years, a compound annual growth rate of 5.1 percent. Most of this increase will be in the Asia-Pacific region.
The regions two-wheeler population is expected to rise from approximately 500 million units in 2017 to almost 700 million units in 2022. Other regions appear to have no or little change in two-wheeler parc through the next five years.
Combined, India, China, Indonesia and Thailand account for over half of total motorcycle oil demand. In these key countries BP and Shell are competing to be the largest supplier, and Honda, Bharat Petroleum Corp. Ltd. and Monarch are trailing behind.
At the moment the worlds top two largest consumers of motorcycle oils are India and China. Sushmita Dutta, project manager at Kline and webinar presenter, believes this may change. Indonesia may surpass China in the next five years, she said in an interview. This is because Chinas demand is falling.
The two-wheeler population is declining in China due to consumers shifting towards passenger cars and electric two-wheelers, the usage of car- and bicycle-sharing platforms and motorcycle restriction policies. Going forward Chinas two-wheeler population is expected to decline further, Dutta explained.
Kline anticipates India will remain on top as it is the largest two-wheeler producer and has the largest market for factory-fill. Unlike China, the two-wheeler market in India is far from saturation, and there are market segments, the potential of which has not been fully tapped, such as rural and semi-urban. The two-wheelers growth in India will be driven by the scooters segment, which has witnessed double-digit growth in the past few years, she noted.
In the top four countries - India, China, Indonesia, Thailand - two-wheelers are primarily used for transportation. This is because individuals in these countries tend to not have car purchasing power. Hence, [they] prefer two-wheelers as a mode of daily personal transportation. Besides, the overall operating cost of a car is much higher than that of a two-wheeler, so people prefer two-wheelers to save on fuel and vehicle maintenance cost, explained Dutta.
Across the region, SAE 20W-40/50 is the leading viscosity grade, with 10Ws following closely behind. JASO MA/MA1 and MA2 specifications lead in all the markets; however, MB grade has sizable demand in Thailand, Indonesia and Vietnam, Dutta said during her presentation.
Electric two-wheelers are expected to witness growth in sales, however, in view of the current market conditions and government policies in most countries, the market for these vehicles is expected to remain niche, Dutta asserted.