What can inspire the UK’s consolidated lubricant market to spur further growth?

The United Kingdom’s lubricant market has grown strongly over the past decade and now is one of the benchmarks of an established industry. But, are there any new potential breakthrough activities that can further take an already robust industry to new heights?
This whitepaper delves into the intricate market dynamics, emerging trends, and strategic opportunities that could fuel the next phase of expansion. Read on to uncover what can reshape the future of the UK’s lubricant industry.

1. The lubricant market in the UK is stable with an increasing focus on sustainability & eco-friendly approaches to manufacturing lubricants

I: EMERGING PHASE

<2010

• Castrol Classic oils was one of the companies that revolutionized the use of lubricants in UK during the first half of 20_th century.
• Emergence of many new players exploring cutting end technology was major driver of growth in this period.

II: GROWING PHASE

2010 - 2030

• The market experienced a downfall in this period due to the impact of Covid-19 on the supply chain and negative rate of manufacturing in terms of automobile manufacturing.
• Currently, the market is UK is established; however, growth is expected as market recovers from Covid and explores new market opportunities in the EV market.

III: MATURITY PHASE

<2030

• The market is expected to focus more towards sustainability and maintainability in terms of market share.
• Growth is expected in terms of new products that are more sustainable and eco-friendly as well as new product portfolio for Electric Vehicles

Market Potential

• Stage: Growing

Competition

• Moderately consolidated market with Bp Plc Castrol as market leader with ~20.5% share ( basis revenue)
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2. With such a consolidated market with established players offering quality products, the consumer’s prime objective is the cost of the lubricant

Factors	Description	Importance
Price of the Lubricant	The Purchase Decision is Highly Price Sensitive. Customer is willing to purchase high cost lubes for expensive vehicle. Low Price raises suspicion about the product quality in mind of customer.
Recommendations by the Mechanic and Brand Reputation	Customer purchases product recommended by mechanic or are well known due to the lack of technical knowledge. Companies such as Shell, Bp Plc Castor and TotalEnergies are some of the most famous manufacturers of lubricants in United Kingdom.
Quality of the Lubricant	Fleet Owners and individuals are particular about the quality of lubricant as it is an expensive product. Vehicle’s life and performance quality is affected by the quality of the lubricant, therefore consumers adopt for good quality product
Availability of the product	Lubricants are widely available through car service stations, supermarket, hypermarket, distributors and online shops. Mechanics or personnel prefer products which are easily accessible to them.

Source: Interview with Industry Experts, Ken Research Analysis

3. Even when the market is well established, it faces challenges due to a shortage of base oils, ban on Russian imports, and lengthy paperwork

Shortage of Base Oils

• After the pandemic, the demand for fuel for vehicles on road and paraffin for aviation has decreased. The demand for paraffin has decreased by ~80.0%¹ after Coronavirus.
• Other refinery products and other products that produce base oil for lubricants have been short in supply.

Lengthy paperwork process

• Products are blended in mainland Europe and imported to UK. Since UK is not a part of EU anymore the custom related process has become more tedious.
• Also, it has become a challenge for local companies to get raw materials such as base oils and additives

Ban imposed on Russian oil

• In 2022, UK imposed a ban on import of crude oil from Russia as a reaction to the Russia-Ukraine war.
• This ban affected UK and other western economies in terms of rising prices of crude oil.

Environment related concerns

• Carbon emission and environmental issues have been a major concern highlighted by the government of UK.
• There are a lot of strict regulations that revolve around in this market posing a challenge for the players.

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4. However, the market can tap the opportunity generated by the demand for specialized lubricants for EVs which indicates a positive growth prospect till the end of this decade

STRENGTH

• Rising Economy: With a ~7.6% growth rate in 2021 after a decline in 2020; UK’s economy is a major factor for the growth in the lubricants market.
• Increase in Industrialization: In 2021, manufacturing industry contributed ~17.0% to the overall GDP. Increase in industrialization in the region results in growth in the lubricants market.

OPPORTUNITY

• Increase in demand for synthetic lubricants: From ~25.6% market share in 2017 to ~42.3% in 2022 the demand for synthetic lubricants has been increasing due to rising pollution and sustainability-related concerns.
• Development of lubricants for EVs: Electric Vehicles have been gaining popularity in the region; there are growth opportunities in developing efficient lubricants for such vehicles.

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