When it comes to industry insights, GfK is a go-to business. The organisation offers industry insights on customer products, and Express Mobility reached out to know more about the lubricant industry in India. With the growing number of automobiles on the road, sales of lubricants have also risen, and we were keen to know more.
In a conversation with Anant Jain, the Head of Market Intelligence at GfK, we get to know crucial insights.
What is the overall market size by volume of lubricants? What is the market estimation by tier size?
As the country’s automotive sector and industrial expansion continue, lubricant consumption in India is projected to surge. According to GfK Automotive Engine Oil Retail Census Study conducted in 94 cities (population > 5lakhs), the annual market for lubricants in India is estimated to be 130 million litres. This represents sales from around 93,000 auto retail shops across the country. Due to the high vehicle population in larger cities, almost 80% of the estimated market lies in tier 1 cities (population > 10 lakhs).
Which regions have seen an acceleration in setting up of new outlets in the last 5 years across pan-India?
Approximately 20k new outlets have come up in the last 5 years (2016-20) across pan-India, majorly in the North and West zone. North with 24% has seen the highest proliferation of new outlets, closely followed by South, West, and East where the new outlets lie between 19% – 23%.
What is the individual contribution of different outlets types towards lubricant sales?
The outlet market is segmented majorly under four categories; Automotive workshops, auto-spares, gas stations, and lubricant retailers. The study reveals workshops are the highest contributor with almost 45% of total sales registered from this channel. This is because vehicle owners rely largely on the expertise of workshop representatives to make the right choice of oil during servicing. Almost one-third of the sales are recorded from “Auto spare parts” shops i.e,28% of total outlets in the market. This is followed by Gas/ Fuel stations accounting for 14% of total sales and 11% from shops selling lubricants as their main business.
What are the key channels skewed by geographies?
Cities in the north have the highest sales contribution for all channels including Workshops, Gas/ Fuel stations, Auto spare parts shops et al. However, lubes retailers have relatively higher sales from the South region. The top 5 Cities contributing to lubricant sales volume are Hyderabad, Delhi, Ahmedabad, Mumbai and Bangalore.
What is the distribution of outlets by type of engine oil being sold (Motorcycle/ Passenger Vehicle/ Commercial vehicle)?
Of all retail shops covered in the GfK study, 71K outlets, i.e, 76% of them sell Motorcycle Oil while 28K outlets, comprising 30% of the market, sell Passenger Vehicle Oil. Commercial vehicle oil sells across 14K outlets, comprising the least number of shops (15%) in these large urban cities.
How is the market size by type of engine oil by various zones?
The contributions of cities in the north and west to various types of engine oil are comparable; each of these zones consumes roughly a third of the anticipated volume market. The South accounts for almost a fifth of the market, while the East accounts for approximately 10%.
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