Indonesia Lubricants Market Outlook 2030

Indonesia Lubricants Market Overview

• The Indonesia lubricants market is valued at USD 903.1 billion, based on a five-year historical analysis. This market is primarily driven by the growing demand in the automotive sector, which accounts for the majority of lubricant consumption. As Indonesia continues to experience an increase in vehicle ownership and the expansion of manufacturing industries, the demand for lubricants in engine oils, transmission fluids, and other automotive applications is increasing.

• Java dominates the lubricants market in Indonesia due to its high concentration of automotive manufacturing and heavy industries. Major cities such as Jakarta and Surabaya have significant demand for lubricants, driven by their role as industrial and commercial hubs. The presence of major automotive and manufacturing companies in these cities makes Java the primary region for lubricant consumption. Additionally, Sumatra is another important region, benefiting from its expanding agricultural and mining sectors that require heavy machinery and industrial lubricants.
• The Indonesian government has implemented stringent certification standards for lubricants, which must meet national quality benchmarks to be sold within the market. The introduction of a national certification program in 2018 has ensured that lubricants used in industrial and automotive sectors adhere to high performance and environmental standards. By 2023, more than 500 million liters of lubricants sold in Indonesia were certified under these guidelines, contributing to the overall improvement of product quality and environmental compliance.

Indonesia Lubricants Market Segmentation

By Product Type: Indonesia's lubricant market is segmented by product type into mineral lubricants, synthetic lubricants, semi-synthetic lubricants, and bio-based lubricants. Recently, synthetic lubricants have gained a dominant market share due to their superior performance, longer lifespan, and suitability for high-performance engines and industrial applications. Their growing popularity is driven by the demand for more efficient and environmentally friendly options. Major companies like Shell Indonesia and ExxonMobil are leading players in this segment, contributing to its significant market presence.

By End-User Industry: The Indonesia Lubricants market is segmented by end-user industry into automotive, industrial, marine, and agriculture. Recently, the automotive segment has dominated the market due to the high demand for engine oils and transmission fluids, driven by the large vehicle fleet and expanding urbanization. The segment's growth is further bolstered by the increasing number of two-wheelers and commercial vehicles, as well as the rising middle-class population. Key players like PT Pertamina Lubricants and Shell Indonesia have a strong presence in this segment, contributing to its substantial market share.

Indonesia Lubricants Market Competitive Landscape

The Indonesia lubricants market is dominated by a few major players, both local and international. Companies susch as PT Pertamina Lubricants, Shell Indonesia, and ExxonMobil dominate due to their extensive distribution networks, partnerships with original equipment manufacturers (OEMs), and strong brand presence. These players have also made substantial investments in technology and sustainability, ensuring that their products meet both industrial and environmental standards.

Indonesia Lubricants Market Analysis

Indonesia Lubricants Market Growth Drivers

• Increasing Automotive Fleet: Indonesia's automotive fleet is expected to grow significantly. However, projections for new vehicle sales indicate a more modest increase. The Indonesian Automotive Manufacturers Association (Gaikindo) forecasts that car sales will reach approximately1.05 million units in 2024, which is a2.9% increasefrom the previous year, rather than exceeding21 million vehiclesby the end of 2024, the automotive lubricant sector is set for steady demand growth. The automotive sector remains a key driver, as personal vehicle usage and commercial transportation needs escalate across the archipelago, further fueling the lubricant market. Data from the Indonesian Ministry of Transportation corroborates these developments.
• Industrialization in Key Sectors: Indonesia's industrial sector, particularly manufacturing, is expanding, with a significant increase in industrial output across the automotive, steel, and construction sectors. The governments 2022 initiative to increase industrialization has led to over 15 new industrial parks, boosting lubricant demand for machinery maintenance and operations. Industries such as cement manufacturing, steel, and petrochemicals require continuous lubrication for smooth operations. This development is expected to support demand for industrial lubricants across heavy machinery and processing units. Supported by data from Indonesias Ministry of Industry, industrial expansion remains a key growth driver for lubricants.
• OEM Agreements for Aftermarket Services: Collaborations between Original Equipment Manufacturers (OEMs) and lubricant manufacturers are becoming more frequent, with over 200,000 service agreements signed for aftermarket services in 2023. These partnerships enhance the use of OEM-approved lubricants in automotive aftersales services, strengthening demand for premium-grade lubricants. Global OEMs such as Toyota, Honda, and Mitsubishi have entered long-term service agreements, particularly for vehicle maintenance, ensuring that OEM-specific lubricants are used for high-performance and warranty protection.

Indonesia Lubricants Market Challenges

• Fluctuating Base Oil Prices: Indonesias lubricant market is highly vulnerable to the volatility of global crude oil prices, as base oil constitutes a primary raw material in lubricant production. Since 2022, base oil prices have fluctuated significantly due to geopolitical tensions and supply chain disruptions. In 2023, crude oil prices averaged USD 75 per barrel, directly impacting lubricant production costs and market pricing. The uncertainty in the global oil market poses a challenge for lubricant manufacturers to maintain cost-effectiveness while ensuring quality standards.
• Stringent Environmental Regulations: The Indonesian government has implemented strict environmental regulations, with the introduction of emission standards such as Euro 4 for automobiles, and industrial emission norms that limit pollution levels. These regulations, coupled with the Ministry of Environment's 2023 guidelines on the permissible use of industrial lubricants, are compelling companies to shift toward eco-friendly alternatives. Compliance with these stringent standards requires significant investment in R&D for lubricant manufacturers, especially as bio-based and low-emission lubricants become mandatory for industrial applications.

Indonesia Lubricants Market Future Outlook

Over the next five years, the Indonesia lubricants market is expected to experience significant growth driven by several factors, including the expansion of industrial sectors, rising vehicle ownership, and the shift towards environmentally sustainable lubricants. Continuous government initiatives promoting infrastructure development and green energy projects will further bolster lubricant demand across automotive, industrial, and marine sectors. The increasing adoption of electric vehicles (EVs) and the development of high-performance lubricants specifically for EVs will play a crucial role in shaping the market's future trajectory.

Market Opportunities:

• Green and Sustainable Lubricants: The demand for green and sustainable lubricants is rising in Indonesia, with manufacturers increasingly focusing on bio-based and eco-friendly products. As of 2023, a significant portion of the countrys lubricant market consists of bio-based lubricants, and this number is expected to rise as stricter emission norms are enforced. Sustainability initiatives led by both the government and private sector are promoting the transition to environmentally friendly alternatives, particularly in sectors such as manufacturing, agriculture, and transportation. These developments are aligning with the country's broader environmental goals.
• Customized Lubricants for OEMs: OEM-specific lubricants tailored to the exact needs of vehicle manufacturers are gaining traction. With over 200,000 vehicles produced annually by domestic and international manufacturers in Indonesia, the need for high-quality, customized lubricants is critical for maintaining performance and warranty compliance. OEMs such as Honda, Toyota, and Daihatsu are increasingly specifying lubricant types for their vehicle models, providing a competitive edge to lubricant manufacturers that can meet these demands.