Automotive Oil Market

The global Automotive Oil Market is valued at USD 40.8 Billion in 2023 and is projected to reach a value of USD 55.4 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 3.5% between 2024 and 2032.

Key Highlights of Automotive Oil Market

• The market was mainly led by the Asia Pacific region in 2023, accounting for 42.1% of the total market share
• North America is anticipated to observe significant growth during the forecast period
• In 2023, the Fully-synthetic segment accounted for 37.1%
• The Diesel segment significantly contributed to the market’s expansion, constituting over 52.5% of the overall revenue share in 2023
• In 2023, the Passenger Cars segment played a crucial role in the market’s growth, representing the majority of the revenue share, i.e., 37.4%
• Specifically tailored for oils with an SAE viscosity grade of 0W-16, this standard was introduced in May 2020 with a multifaceted aim. It’s engineered to offer robust defense against low-speed pre-ignition (LSPI), safeguard timing chains from wear, shield pistons and turbochargers from high-temperature deposits, ensure stringent control over sludge and varnish buildup, enhance fuel efficiency, and provide protection for the emission control systems

Automotive Oil Market: Regional Overview

The Asia Pacific Automotive Oil market showed significant dominance in 2023, with 42.1% of revenue share. The Asia Pacific Automotive Oil market is witnessing robust growth driven by increasing vehicle ownership, expanding automotive industry, and rising demand for fuel-efficient vehicles. Increased awareness of engine maintenance, lubrication needs, and strict emission rules are also supporting market growth. Moreover, technological developments such as developing oils compatible with conventional and hybrid fuels have made it possible to meet the varied needs of vehicles in this region.

U.S. Automotive Oil Market Overview

The Automotive Oil market in the United States, with a valuation of USD 6.2 Billion in 2023, is projected to reach around USD 7.6 Billion by 2032. This forecast indicates a substantial Compound Annual Growth Rate (CAGR) of 2.3% from 2024 to 2032. In the United States, gasoline is the foremost petroleum product in terms of consumption. Throughout 2022, the average consumption of finished motor gasoline hovered around 8.78 million barrels per day (equivalent to 369 million gallons per day), constituting roughly 43% of the total petroleum consumption in the country. Finished motor gasoline encompasses fuel ethanol and denaturants.

The global Automotive Oil market can be categorized as Grade, Engine Type, Vehicle Type, and Region.

Automotive Oil Market: Grade Overview

There was remarkable growth, with 37.1% in the Fully-synthetic segment in 2023. Based on the Grade, the Automotive Oil market is categorized into Mineral, Semi-Synthetic, and Fully-synthetic. The fully-synthetic segment in the Global Automotive Oil market is experiencing significant growth propelled by the escalating demand for high-performance lubricants. Fully-synthetic oils offer superior engine protection, extended drain intervals, and enhanced fuel efficiency compared to conventional and semi-synthetic counterparts. The ability of full synthetic oils to cope with crucial engine problems like wear, oxidation, and deposit formation has been further enhanced by Advancements in additive technology.

Automotive Oil Market: Engine Type Overview

In 2023, substantial expansion was observed in the global Automotive Oil market within the Diesel category, commanding a revenue share of 52.5%. The Engine Type segment is divided into Gasoline, Diesel, and Alternative Fuels. Due to the widespread use of diesel engines in various applications, such as commercial vehicles, trucks, buses, and heavy machinery, the Diesel segment within the global Automotive Oil market is experiencing considerable growth. The demand for upgraded diesel engine oils is increasing due to stricter emission regulations and a focus on fuel efficiency. In addition, diesel engine oils are improving their lubrication properties through the innovation of additive technologies and the formulation process, addressing critical engine problems and driving growth in the diesel segment in the global automotive lubricant market.

Automotive Oil Market: Vehicle Type Overview

In 2023, the global Automotive Oil market experienced significant growth, with a 37.4% share in the Passenger Cars segment. The Vehicle Type segment is segmented into Passenger Cars, Light Commercial Vehicles, Heavy-Duty Vehicles, and Motorcycle. The Passenger Cars segment in the Global Automotive Oil market is witnessing steady growth driven by rising vehicle ownership and increasing demand for maintenance products. The demand for engine oils adapted to their particular requirements is stimulated by passenger cars, which comprise a large part of the global automotive fleet. To satisfy the consumer’s requirements for optimum performance and durability, engine oils used in passenger cars are based on fuel efficiency, engine cleanliness, and longer service intervals.

Key Trends

1. The increasing adoption of synthetic engine oils is due to their superior performance, extended drain intervals, and better engine protection.
2. The development of low-viscosity oils and friction-reducing additives is being driven by the growing demand for engine oil formulated to improve fuel efficiency and meet stringent emission standards.
3. The demand for eco-friendly and sustainable engine oil formulations is driven by increasing awareness of environmental issues, which has resulted in the development of biodegradable or renewable-source oils.
4. The increasing penetration of electric-hybrid vehicles (HEVs) and plug-in hybrid vehicles (PHEVs) is influencing engine oil formulations to accommodate the unique operating conditions of hybrid powertrains.
5. Adherence to stringent regulatory requirements and industry standards, including API (American Petroleum Institute) and ACEA (European Automobile Manufacturers’ Association) specifications, driving the development of compliant engine oil formulations.

Premium Insights

ACEA, which stands for Association des Constructeurs Europeens de l’Automobile (Association of European Engine Manufacturers), establishes engine oil specifications based on rigorous European testing protocols. These specifications serve as a comprehensive set of requirements for European vehicle manufacturers. ACEA specifications are categorized into sequences A, B, and C, with Sequence E specifically designed for trucks. Numerical designations further distinguish each sequence. Sequence A pertains to gasoline engines in passenger cars, while Sequence B addresses diesel engines in passenger cars, vans, and pick-up trucks. Sequence C is tailored for vehicles equipped with advanced exhaust after-treatment systems like diesel particulate filters, necessitating special engine oils to prevent filter clogging. These oils are further classified based on permissible levels of ash-forming substances into Low and Mid SAPS oils under the ACEA C specification. Sequence E outlines requirements for diesel engines in trucks.

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Market Dynamics

The significance of the ILSAC standard in shaping the Automotive Oil market. The ILSAC (International Lubricants Standardization and Approval Committee) Standard for Passenger Car Engine Oils sets a benchmark for automotive gasoline engines. This latest standard, introduced in May 2020, encompasses the performance attributes of its predecessors. It serves modern engines and older ones recommended by earlier category oils. The primary objectives of this standard are to offer comprehensive protection against various engine challenges such as low-speed pre-ignition (LSPI), timing chain wear, high-temperature deposits on pistons and turbochargers, sludge, and varnish buildup. It aims to enhance fuel economy, ensure better emission control system protection, and safeguard engines operating on ethanol-containing fuels, including up to E85 blend.

Shell launched a novel used oil management service, representing a substantial advancement in establishing India’s waste oil management system and enhancing recycling rates. Underscoring its commitment to circular economy objectives and waste reduction, this initiative aligns with Shell’s goal of achieving net zero emissions by 2050. Collaborating with used oil re-refiners across India, Shell is directing the collection and re-refining of used oil nationwide, fostering a circular economy ethos within the lubricants industry. At the same time, Shell has revealed a specially designed Shell Oil engine which is made for three-wheelers, enriched with active cleansing technology, ensuring that engines are kept clean and protected even at high temperatures, for various fuel types, such as CNG, LPG, petrol, and diesel.

Competitive Landscape

Global giants such as ExxonMobil, Shell, and Chevron dominate the competitive Automotive Oil market by offering various engine oils tailored for multiple vehicle types and performance requirements. For instance, ExxonMobil Lubricants Pvt. Ltd. has introduced the ‘Mobil Super Moto Synthetic Technology 15W50’ engine oil, tailored explicitly for four-stroke motorcycle engines, as announced by the company. According to ExxonMobil Lubricants, the cutting-edge formulation boasts a 57% enhancement in wear protection, ensuring extended engine life. Other key players include BP, TotalEnergies, Valvoline, FUCHS, and Gulf Oil, each focusing on innovation, customer service, and brand loyalty to capture market share.

Recent Market Developments

• In Jan2024, Shell extended its collaboration with the BMW Group in the Rest of the World (RoW) and Asia regions. Until 2027, it will remain the exclusive producer and supplier of engine oil for all BMW Group brands’ aftersales operations in these areas.
• In Jan 2024, Valvoline Global, a prominent provider of automotive and industrial solutions globally, unveiled its revolutionary premium full synthetic motor oil, Restore & Protect, on a global scale. This pioneering product is designed to eliminate engine-damaging deposits by up to 100% with consistent usage, restoring engines to their factory-clean condition while safeguarding against potential future damage.
• In March 2023, ExxonMobil invested almost INR 900 crore (equivalent to $110 million) to construct a lubricant manufacturing facility in Raigad’s Maharashtra Industrial Development Corporation’s Isambe Industrial Area. Upon completion, the plant is anticipated to have the potential to produce up to 159,000 kiloliters of finished lubricants annually.
• In March 2023, Shell and Wärtsilä have extended their strategic collaboration for engine lubricant solutions. Under this arrangement, Shell will serve as Wärtsilä’s designated strategic partner for lubricant solutions across all engines. Building upon the Testing Oil Partnership agreement initiated in 2020, Shell became Wärtsilä’s exclusive test oil partner for engines during research, development, and factory testing.