MOSCOW – Russias automotive lubricant market is expected to grow around 12 percent by 2020, driven by increased passenger car sales that should push the countrys on-road automobile fleet above 51 million units, a market analyst told a recent industry conference.
According to a study conducted by the Moscow-based Russian Automotive Market Research, the country consumed 904 million liters of light- and heavy-duty engine oils in 2014. We are expecting the market for these categories to grow to 995 million liters by 2020, Tatyana Arbadzhi, head of RAMR, told GBCs Base Oils, Lubricants and Fuels conference held here in May. In 2014, Russian passenger cars consumed 367 million liters of finished lubricants. The studys data on total motor oil consumption excludes factory fill volumes.
RAMR found that the total number of passenger cars in Russia reached 44.7 million units in 2014. We expect this segment to reach 49 million to 50 million units in 2020, but it will depend on many factors, Arbadzhi observed. Because of certain political and macro-economic reasons, the purchasing power of the Russian people has been decreasing. We expect significant drop in car sales in 2015 with a certain market rebound after 2016.
The market research firm also expects the government to introduce new regulations to stimulate the market. This could include measures that encourage the scrapping of old vehicles by increasing insurance rates for the older vehicles and categorizing vehicles by their emissions footprint. It could lead to [somewhat of] a renewal of the countrys vehicle fleet, but we dont expect these unpopular measures to be implemented during a time of crisis, Arbadzhi noted.
On the other hand, what we see as a trend in recent years is increased sales of sport utility vehicles, as well as surge in sales in the premium car segment of brands like the Japanese Lexus and the German Mercedes, Audi and Porsche brands, she said.
The number of trucks, buses and light commercial vehicles is also expected to rise, albeit at more moderate rates. This results from the fact that there are no large infrastructural, agricultural or mining projects that could be a driver for more robust growth and replenishment in this category, Arbadzhi said. She added, However, we see a trend of demand growth for heavy-duty trucks and equipment with over 16 tons of weight.
In this category, light commercial vehicles show the strongest rate of growth, and the market research firm expects their population to grow to 5.2 million units by 2020. The number of heavy-duty vehicles is expected to increase from 3.6 million to 3.9 million in 2020, while the number of busses could increase from 500,000 to around 600,000 units in 2020.
Passenger car owners are the biggest category of engine oil consumers in Russia, and in 2014 they consumed 367 million liters. They were followed by truck owners, who consumed 341 million liters and light commercial vehicle owners that consumed 168 million liters. In the same year, bus operators consumed just 28 million liters of engine oils.
In the passenger car and light commercial vehicle categories, foreign brands consumed larger volumes of engine oils than domestic brands. In 2014, foreign-branded cars consumed 211 million liters of engine oils versus domestic car brands that consumed 156 million liters. In the same year foreign-branded LCVs consumed 105 million liters of engine oils compared to domestic LCVs that consumed 63 million liters.
The firm found the reverse situation in the truck and bus category. Russian-made trucks consumed 238 million liters of engine oil in 2014, whereas foreign-branded trucks consumed just 103 million liters. For the same year, domestic buses consumed 22 million liters of engine oils, and foreign models buses consumed just 6 million liters.
Gasoline-powered cars consumed 354 million liters of engine oil in 2014, RAMR found, compared to 11 million liters consumed by diesel-powered cars. Cars powered by other fuels consumed just 1.5 million liters of motor oils in 2014. Gasoline and diesel car engines are expected to drive the motor oil market in Russia and consume 390 million liters and 20 million liters respectively by 2020, Arbadzhi indicated.
The Lada has traditionally been the most popular car in Russia and the brand that consumes the most engine oil. RAMR found that in 2014 Ladas consumed 92 million liters of engine oil. The next biggest oil-consuming brands were Toyota (41 million liters) Nissan (18 million liters), Chevrolet (13 million liters) and Hyundai (11 million liters).
In terms of geography, the capital city of Moscow consumes more engine oils than any other jurisdiction – 33 million liters in 2014. It was followed by the greater Moscow region with 22 million liters, and the Primorsky region in Russias Far East, with 16.5 million liters.