Russian Engine Oil Sales Sag


Engine oil demand in Russia rose 2.4 percent in 2014, according to a newly released study from market researcher RPI. The Moscow-based company said the market would have grown more had it not been held back by the countrys economic problems.

Over the past few years, the motor oil market has witnessed dramatic changes on the demand side, Nikita Medvedev, the consultancys senior analyst, told Lube Report. These changes were mainly caused by overall negative trends in the Russian economy. The consumer demand decline and the turnover reduction had a negative impact on most industries, and the motor oils segment was no exception.

Photo: Ilya Pitalev – Lube Report

RPIs study, Motor Oil Consumption in Russia: Current State and Prospects, concluded that the country consumed 466,000 tons of engine oils in 2014, up from 455,000 tons in 2013. Fifty-three percent of the 2014 volume was for passenger cars, 31 percent for heavy-duty trucks, and 16 percent for light commercial vehicles and buses combined.

RPI predicted the nations automotive lubricants demand will grow an average of 2 percent annually to reach about 530,000 tons in 2020. It is in fact less than the projection last year of 563,000 tons in 2020, Medvedev said. He added that demand for engine oils for passenger cars and light commercial vehicles are expected to rise an average of 3 percent and 2 percent, respectively, while demand for oils used in heavy-duty trucks and buses are forecast to decline until 2017. Thenceforth we forecast these categories to have average annual growth rate of 1 percent to 2 percent through 2020.

Russian engine oil demand grew considerably faster than the previous three years due to steep increases in vehicle sales. Since then, auto sales have been hampered by an economic downturn caused by factors such as sanctions over the annexation of Ukraines Crimea and the crash in oil prices.

RPI found demand for automotive lubes greatest in Russias Central, Volga and Siberian Federal Districts. In 2014 these regions comprised around 60 percent of the total automotive lubricant demand in the country. The region with the highest per capita consumption was the Far East Federal District, and it consumed about 5 tons of automotive lubricants per 1,000 people, Medvedev observed. In the remaining regions – the Central, Northwestern, Southern, Siberian, Ural, Volga and North-Caucasian [districts] – this indicator stood at 2.5 to 3.4 tons of motor oil consumed per 1,000 people.

In 2014, auto manufacturers in Russia sold 1.75 million passenger cars, 115,500 light commercial vehicles, 71,100 heavy-duty vehicles and 10,600 buses, RPI said citing government statistics. Those numbers are expected to grow significantly in coming years due to the scheduled opening of new auto manufacturing plants.

For more information about the RPI study, available in Russian and English, click here.

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