Q1.) Could you provide an overview of the current stage of the lubricants market in Italy?
Ans: Certainly. In Italy, the industrial production has been on the rise after the post-covid years, and there's been a recent influx of investment from the European Union, contributing to the country's overall growth. However, the demand for lubricants consumption in Italy isn't very strong, leading oil companies to keep their refineries under maintenance to reduce raw material production. The market has experienced significant price volatility, causing lubricant distributors to be cautious about maintaining stock levels. This situation is prompting both oil companies and distributors to focus on optimizing their businesses and managing costs effectively.
Q2.) Could you summarize the post-covid situation in the market and the factors affecting this sector?
Ans: The lubricants market suffered a significant decline during the covid period but is now recovering from the loss. Vehicle sales data, especially in the commercial vehicles segment, is promising, suggesting a potential growth trajectory for lubricants. Despite the challenges, a growth of around 5-10% with the engine oils growing at 3% and the Industrial oils at 5% is anticipated this year. Factors such as raw material availability, competitive prices, and adherence to new European emission regulations will drive this growth.
Q3.) Who are the leading players in the lubricants market in Italy?
Ans: In terms of market share, key players in the industrial lubricants segment include Eni, Total, Shell and ExxonMobil, among others. In the automotive lubricants sector, Petronas, ENI and Total are prominent, with other brands like Shell and ExxonMobil. Notably, traditional companies historically hold no more than 10% market share, with Fiat Petronas and Eni dominating.
Q4.) What is the anticipation of the future trends in the market?
Ans: Addressing environmental concerns, there's a focus on updating formulations to meet new European emission regulations, as well as efforts to promote the recovery of used oils and packaging. Changes in automotive technology, such as the rise of hybrid and electric vehicles, are expected to have a significant impact in the next two decades. However, the price difference between combustion engine and electric vehicles remains a key factor in the adoption rate. The synthetic lubricants market is likely to grow further, particularly due to advancements in commercial vehicle technologies.
Q5.) What are the major challenges and opportunities facing lubricant dealers in Italy?
Ans: Dealers in Italy face challenges related to high taxation and regulatory requirements. Profit margins are constrained, with taxes impacting profitability, and customers being charged environmental and excise duty taxes. A further crucial challenge is to recruit sale staff: young generation seem to prefer sedentary work than to travel as customers hunter. The key challenge is to educate and train young generations and staff to understand the technical aspects of lubricants. While direct sales account for around 20%, the supermarket business in Italy remains limited (around 3%) due to the preference for purchasing lubricants with brand assurance.
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Ankur Gupta, Head Marketing & Communications