Using Radar, its online survey system for motor oil consumption across several vehicle categories, Autostat expects positive growth of up to 2.5 percent in 2018 for passenger car motor oils, up to 3.5 percent for light commercial vehicles and up to 1 percent for heavy-duty vehicles and buses.

On the Radar

There are around 50 million road vehicles in Russia, including passenger cars, light commercial, heavy duty and buses. Combined, they consumed 435 million liters of motor oil in 2016, up from 432 million liters in 2015, according to the Moscow-based consultancy, which analyzes the regions automotive sector. Of that, 232 million liters were used by passenger cars, 135 million liters by heavy-duty trucks, 53 million liters by light commercial vehicles and 15 million liters by buses. Forty-six percent of the motor oils consumed by passenger cars were made in Russia, the rest were imported, Pushkarev said.

Since 2015, Autostat has also been monitoring neighboring Ukraine and Kazakhstan, both of which have engine oil markets that have stagnated in the past couple years. Ukraines 13 million road vehicles consumed 135 million liters of oil in 2016, down from 136 million liters the year before. That was split between passenger cars (54 million liters), light commercial vehicles (19 million liters), heavy-duty trucks (55 million liters) and busses (7 million liters).

Kazakhstan had 4.4 million road vehicles, which consumed 42 million liters of oil both in 2016 and in 2015. Of that, passenger cars consumed 20 million liters, light commercial vehicles 4 million liters, heavy-duty trucks 16 million liters and buses 2 million liters.

Export Scene

Autostat also found that a significant portion of the motor oils consumed in both countries were imported from Russia. Of the 135 million liters of demand in Ukraine, 37 percent was imported from its biggest neighbor, Pushkarev said, adding that Russian imports accounted for around 86 percent of Kazakhstans demand.

Of the 435 million liters of motor oils consumed in Russia in 2016, 55 percent were manufactured in the country, while 45 percent where imported. In 2016, 216 million liters of motor oils were imported to Russia, up from 2014 million imported in the year before, according to Puskarev.

Russias single largest import source for motor oils is South Korea, which supplies 14 percent of the total demand, according to customs documents collated by Autostat from the Federal Customs Service of the Russian Federation. This was followed by Germany and Belgium with a 12 percent share each, Japan at 5 percent, other European Union countries a combined 22 percent 2016 and non-EU countries 34 percent share.

Russia exported 337 million liters of motor oils in 2016, a 17 percent increase from 287 million liters in the year before. The largest export destinations were Turkey (20 percent), Ukraine (17 percent), Kazakhstan (14 percent) and Belarus (3.5 percent), while other CIS countries took a combined 15 percent

In 2016 Russian energy giant Lukoil exported 23 percent of the countrys products, the largest share. It was followed by Gazprom Neft and Devon, which sent 22 percent each. The rest were held by Rosneft (8 percent), Bashneft (3 percent), Delfin Group (3 percent) and Obninskorgsintez (2 percent). The remaining 17 percent goes to other producers.

In the same year, ExxonMobil held the largest share of total motor oil imports, at 22 percent. It was followed by BP (14 percent), Total Lubrifiants (8 percent), SK Lubricants (6 percent), Motul (3 percent), SCT Lubricants (3 percent) and the remaining 35 percent by other small importers.

Points of Sale

A total of 197 motor oil brands were sold in Russia in 2016, according to the Autostat consultancy. Of these, 24 products were original equipment manufacturer-branded oils, while 12 brands were owned by domestic marketers. The most prominent motor oil brand offered in Moscow points of sale is Mobil, followed by Lukoil, Liqui Moly and Castrol, Pushkarev said

Autostat found that during January and February 2017, Moscow points of sale offered 67 motor oil brands, including 35 imports, 12 owned by domestic oil companies and 20 OEM brands. During the same period, the St. Petersburg market had 73 brands, 48 of which were imported compared with nine domestic oil marketer brands and 16 OEM brands. The selection of brands offered in other big Russian cities, such as Rostov-on-Don, Samara or Ekaterinburg, was lower at between 20 and 30 brands.

The average retail price difference between imported and Russian-made semi-synthetic motor oils has become wider in the last couple of years, compared with the average retail price gap between imported synthetics and domestic products, according to the consultancy. Semi-synthetics are made with a mix of Group I and Group III base oils. The cheap Group I made in Russia floods the market and gives domestic producers competitive price advantage over the imported products.

Autostat also found that the overall Russian market for finished lubricants in the automotive sector grew slowly. However, we are experiencing a growth of consumption in synthetic and semi-synthetic products as a result of the new car sales growth, especially in foreign brands, Pushakrev said.

The consultancy expects the competition in this market to become fiercer with more aggressive advertising campaigns that employ street billboards and TV ads. In the semi-synthetic motor oil product segment, domestic marketers have won a significant competitive advantage, while in the fully synthetic product segment, the price gap between imports and Russian motor is not that large, Pushkarev said. Unlike semi-synthetics, synthetics are made with Group III, which has increased in price everywhere, including internationally, in the past couple of years, making the price gap between imported and domestic products relatively narrow.

Autostat also expects manufacturers of motor oils with production facilities in Russia, be they domestic or foreign operators, to continue developing new formulas and new labels in order to expand the assortment of products. This will lead to more competitiveness and more cooperation and agreements with original equipment manufacturers and distributors, Pushkarev concluded.