Demand for lubricating oil additives is largely driven by the types of applications they are used for, e.g., automotive and industrial/marine engines, as well as engineering plastics mainly applied in aerospace components. Demand for additives is also determined by their performance properties, such as high temperature stability to ensure that oils do not break down under extreme pressure or heat; anti-wear additives to prevent damage to surfaces; viscosity index improvers (VIIs) to adjust the consistency of oil depending on temperature; anti-foaming agents which minimize bubbles forming thus improving engine efficiency and parts longevity; corrosion inhibitors to reduce wear due to water and oxygen ingress into a machine's metal parts whilst running, etc.
The growing application of lubricant additives in automotive engines for increasing fuel economy, reducing harmful emissions and meeting regulatory norms are expected to aid in lubricating oil additives market growth over the next five years.
Automotive Sector to Continue Dominating Lubricating Oil Additives Market
Demand for oil additives used in automotive/transportation machines such as cars, buses and truck are also expected to rise due to increasing car production rates especially in Asia Pacific countries such as China where car ownership is growing faster than developed regions of Europe and USA which will lead to increase in the demand for lubricants globally. The market for automotive additives is expected to grow significantly in the next few years. This can be attributed to the increasing demand for automobiles, especially in developing countries such as China and India. In addition, stringent environmental regulations are also prompting automobile manufacturers to use more efficient and environment-friendly lubricants and additives.
One of the key trends in this market is increasing production of two-wheelers and commercial vehicles. The number of passenger cars sold in Europe increased by 4.4% in 2018 while that of commercial vehicles rose by 1.7%. According to European Automobile Manufacturers Association, the total sale of passenger cars and commercial vehicles was 21,282,176 units in western Europe during 2018. This growth is expected to continue with sales reaching 19,3 million by 2020 based on current demand trends.
Engine Oil to Lead Global Lubricating Oil Additives Market
It is not surprising that engine oil is the largest application for lubricating oil additives. After all, these additives are essential for keeping engines running smoothly and preventing wear and tear. Without them, engines would quickly wear down and require expensive repairs. There are a variety of different types of lubricating oil additives available on the market, each with its own unique set of benefits. Some common additives include antioxidants, corrosion inhibitors, detergents, and dispersants. Wherein, some additives are better suited for gasoline engines, while others are better for diesel engines.
Antioxidants are one of the most common types of lubricating oil additives. They work by preventing the formation of harmful deposits on engine parts. These deposits can cause engines to overheat and wear down prematurely. Antioxidants also help protect against rust and corrosion. Corrosion inhibitors are another common type of additive, which work by protecting metal surfaces from being eaten away by acids and other corrosive substances. Detergents are another important type of additive, as they help keep engines clean by breaking down dirt and grease. This prevents these substances from accumulating and causing problems such as sludge build-up.
Rapidly Growing Demand for Electric Vehicles to Hamper Lubricating Oil Additives Market
The demand for and production of electric and hybrid vehicles is expected to increase significantly over the next five years. Moreover, government regulations on fuel economy and lower emissions will contribute towards this rise in the Electric Vehicle (EV) market despite volatility in oil prices. This would hamper the lubricative oil additives market as it not only reduces dependence on oil but also as a result of heavy taxation on gasoline as well as stringent emission norms within public transport. Global automotive market is witnessing a heavy surge in demand for EVs due to several reasons including favorable government incentive schemes such as tax exemptions/incentives/rebates etc., reduction in operational costs, eco-friendly benefits and increasing environmental concerns. The advent of EVs is estimated to reduce the global automotive oil demand by 11.8 million barrels per day by 2040.
Global sales of EVs are forecasted to rise significantly from 4.2 million units in 2017 to 60.3 million units by 2026, with cumulative sales between 2018 and 2023 estimated to be around 73.1 million units. Lubricating oil additives market is at risk because it has been estimated that EV's reduce oil demand by 11 million barrels per day.
Asia Pacific to Continue Witnessing the Fastest Growth in Global Lubricating Oil Additives Market
The global lubricating oil additives market is expected to grow at a CAGR of 3.5% from 2017 to 2022. Asia Pacific is projected to be the fastest-growing region, followed by Europe and North America. Wherein, China, Japan and India are expected to be the key markets in Asia Pacific. The growth of the automotive and industrial sectors in these countries is expected to drive the demand for lubricating oil additives in the region. In Europe, the UK is projected to be the fastest-growing market for lubricating oil additives, while Germany is expected to be the largest market in terms of revenue. In North America, Mexico is projected to be the fastest-growing market for lubricating oil additives.
Global lubricating oil additives market is majorly dominated by four companies holding 43% of total revenues generated worldwide: ExxonMobil (14%), Royal Dutch Shell (11%), Chevron Corporation (7%) and Total S.A. (6%). Other key players in this industry include BP plc, Fuchs Petrolub SE, Valvoline Inc., Addax Petroleum Company and Idemitsu Kosan Co. Ltd. Top five companies are responsible for half of the global revenue generated in global lubricating oil additives market.
Key Elements Included In The Study: Global Lubricating Oil Additives Market
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