What are Five Trends Shaping the Automotive Engine Oil Economy in 2024?

What are Five Trends Shaping the Automotive Engine Oil Economy in 2024?

The global automotive engine oil market is projected to reach US$55 billion by 2031, up from an estimated US$42.9 billion in 2024. This growth reflects a steady rate of expansion with an estimated CAGR of 3.61% during the forecast period from 2024 to 2031.

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Key Market Insights

• Growth Drivers: The market's growth is driven by increasing vehicle ownership, especially in emerging economies, and a rising demand for synthetic oils driven by high-mileage vehicles.
• Challenges: The adoption of electric vehicles (EVs) is expected to reduce demand for traditional engine oils. Additionally, fluctuating raw material prices are affecting production costs.
• Trends: There is a notable shift towards synthetic and high-performance engine oils, coupled with a focus on sustainability.

Comparative Analysis: 2019 - 2023

From 2019 to 2023, the market demonstrated steady growth, reaching a value of $40.5 billion in 2021. The surge in automobile sales, particularly in developing regions, and the growing preference for high-mileage vehicles contributed to this expansion. Synthetic oils, known for their superior performance, further fueled market growth by offering better fuel efficiency and extended engine life.

However, the rise of electric vehicles presents a challenge, as they do not require conventional engine oil. Fluctuating raw material prices have also impacted production costs. Despite these challenges, the market is expected to continue growing with a CAGR of 3%, driven by stringent emission regulations and increased awareness of preventive maintenance.

Key Growth Determinants

1. Increasing Vehicle Ownership: The rise in global vehicle ownership, particularly in emerging markets, boosts the demand for engine oil for maintenance and lubrication.
2. Automotive Industry Growth: Technological advancements and innovations in the automotive industry, including high-performance and turbocharged engines, drive demand for advanced engine oil formulations.
3. Emission Regulations: Stricter emission regulations and growing awareness of preventive maintenance contribute to the demand for high-quality engine oils.

Major Growth Barriers

1. Electric Vehicles (EVs): The shift towards EVs reduces the demand for traditional engine oils, impacting long-term market growth.
2. Extended Oil Change Intervals: Improvements in engine durability and extended oil change intervals decrease the frequency of engine oil purchases.
3. Environmental Regulations: Increased regulatory pressures and environmental concerns around conventional engine oils pose challenges for manufacturers.

Key Trends and Opportunities

1. Synthetic and High-Performance Oils: The shift towards synthetic and high-performance oils is significant. These oils provide superior lubrication and are increasingly recommended for modern engines, driving consumer preference.
2. Sustainability Focus: There is a growing emphasis on eco-friendly and bio-based lubricants. Companies are investing in R&D to develop renewable and biodegradable oils and improve recycling processes.
3. Emerging Markets Expansion: Opportunities exist in expanding market presence in rapidly urbanizing regions such as Asia Pacific, Latin America, and Africa.

Market Leaders

Key players in the global automotive engine oil market include:

• Saudi Arabian Oil Co.
• Total S.A.
• Exxon Mobil Corporation
• BP p.l.c.
• Chevron Corporation