While other European lubricants markets remain flat, the United Kingdom, the third largest consumer of finished lubricants in Europe, is on the upswing, according to the recently published Global Lubricants: Market Analysis and Assessment report from U.S.-based consulting and research firm Kline & Co.
The top five lubricant markets in Europe account for nearly two-thirds of the region’s demand. Russia, Germany, and the United Kingdom make up about 50% of the total market.
Sharbel Luzuriaga, project lead for Kline’s Energy Practice, attributed this improvement to recovery in the U.K. economy and enhanced consumer confidence, encouraging people to purchase new vehicles. On average, two million new units are projected to be registered in the United Kingdom through 2015, he said.
“Lubricant demand generally trails GDP growth; therefore, it can be anticipated that demand for consumer lubricants will grow at a slightly slower pace than the performance of the overall economy,” Luzuriaga said.
The consumer automotive lubricants market in the United Kingdom is forecast to increase at a compounded annual growth rate of 1% to 2019. Demand for passenger car motor oil (PCMO) in the United Kingdom accounts for approximately 84% of the consumer automotive lubricant segment.
Following the global trend, the United Kingdom is witnessing a migration to low-viscosity grade PCMO, resulting in higher penetration of synthetics and semi-synthetics. Original equipment manufacturer (OEM) recommendations play an important role in driving this shift. Sales of synthetic 0WXX grades are expected to increase in an otherwise flat PCMO market, as OEMs shift their factory fill requirements to lower viscosity grades to boost their vehicles’ fuel economy ratings.
Due to the increased presence of Asian OEMs in the United Kingdom and their tendency to recommend 0W for service fill, as well as European OEMs’ recommendations to use 5WXX grades, the growth for these viscosity grades is forecast to accelerate.
Two viscosity grades, SAE 10W-40 and 5W-30, account for a combined 84% of the total demand for PCMO in the United Kingdom. Demand for SAE 10W-40 has been on the decline. Conversely, low-viscosity grades have started to become the leading viscosity grade in the U.K. market, in particular SAE 5W-30.