Saudi Arabia Lubricants Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)


Posted April 23, 2021 by statzyreports

The Saudi Arabia Lubricants Market was  valued at 310.58 kilotons in 2020 and the market is projected to register a CAGR of  2.05% during the forecast period (2021-2026).
 
The Saudi Arabia Lubricants Market was  valued at 310.58 kilotons in 2020 and the market is projected to register a CAGR of  2.05% during the forecast period (2021-2026). The COVID-19 Pandemic has halted automotive sales in Saudi Arabia and around the world. The sales in Saudi Arabia for Passenger cars in 2020 were 252 thousand units compared to the previous year's 387 thousand units. As the markets are slowly opening up and sales of passenger cars have slowly started, this can be a positive sign for the Saudi Arabia lubricants market.

- Major factors driving the market are the progressing industrial sector in the country and the increasing usage of high-performance lubricants.
- However, an increase in drain intervals in the automotive and industrial sectors is likely to hinder the growth of the market studied.
- By product type, the engine oil segment dominated the market studied. However, the process oil segment is projected to register the highest CAGR during the forecast period.

Key Market Trends

Engine Oil to Drive the Market Growth

- Engine oils are widely used to lubricate internal combustion engines and are generally composed of 75%-90% base oils and 10%-25% additives. They are typically used for applications, such as wear reduction, corrosion protection, and smooth operation of engine internals. They function by creating a thin film between moving parts for enhancing the transfer of heat and reducing tension during the contact of parts.
- High-mileage engine oils are in demand lately, owing to the properties that help in the prevention of oil leaks and reduction of oil consumption. Most of the light and heavy vehicle diesel and gasoline engines use 10W40 and 15W40 viscosity-grade oils, whereas multi-grade oils, like 15W50 and 20W50, are used for aircraft engines.
- The light motor vehicle segment records the highest consumption rate of engine oils among all the segments. Owing to the technological improvements and government-mandated requirements for fuel economy, the automakers have been manufacturing lighter vehicles with tighter tolerances (which make the vehicles more durable).
- The automotive sales increased by about 30.96% during 2019, after witnessing decline for three consecutive years. While in 2020, the automotive demand, in spite of the COVID-19 outbreak, increased in the first half (mostly in June), due to the VAT introduction from July 1.
- According to the General Authority for Statistics, the automotive industry is expected to witness a growth rate of around 4%-5%, annually, over the next decade. This is expected to drive the demand for lubricants over the forecast period.
- The adoption of electric vehicles in Saudi Arabia is currently at early stages. While the country's EV market is still small, Saudi investment in EV manufacturing abroad has been substantial. This is expected to decrease the demand for engine oil in automobiles.
- All the factors mentioned above, in turn, are expected to affect the demand for engine oils in the country during the forecast period.

Automotive and Other Transportation Segment Dominated the Market

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- The automotive and other transportation segment was the major end-user industry in the lubricants market.
- Saudi Arabia is expected to witness a rise in demand for lubricant oils over the forecast period. The country has committed to become the auto hub of the Middle East. The Kingdom is adding rail lines, investing in workforce education, expanding shipping ports, and offering other incentives to attract vehicle makers and suppliers.

- Saudi Arabia is the largest auto and auto parts market in the Middle East, accounting for ~40% of all the vehicles sold in the region. Saudi is the largest importer of US automotive products and parts in the Middle Eastern region, with some of these imports being re-exported.
- Saudi Arabia does not have an automotive production base. However, there is the presence of aftermarket services, which contributes a little to the market. The country is focusing on establishing itself as the new automotive hub in the Middle East. Though the country is a large importer of vehicles and auto parts, it is now trying to attract original equipment manufacturers (OEMs), to open their production plants in the country and to develop the domestic auto industry.
- Additionally, the country is experiencing a steady growth in the sales of new cars. According to the General Authority for Statistics, the automotive industry is expected to witness a growth rate of around 4-5%, y-o-y, over the next decade.

- Saudi Arabia imported majority of its automobiles till date, but with the government’s invitation for FDI in the automotive sector, the country may stand as one of the major producers of automobiles in the region.
- Foreign automotive manufacturers are trying to invest in the market, which is expected to open up opportunities for automotive lubricants.
- All the abovementioned factors, are expected to create demand for lubricants in the country during the forecast period.

Competitive Landscape

The Saudi Arabia lubricants market is highly consolidated, with the top five players accounting for more than 90% of the market. The major companies of the market are Petromin, Aljomaih and Shell Lubricating Oil Company Limited, FUCHS, CASTROL LIMITED and APSCO Arabian Petroleum Supply Company, among others.

Reasons to Purchase this report:

- The market estimate (ME) sheet in Excel format
- 3 months of analyst support

For sample report please visit: https://www.statzyreports.com/report/sr496948/saudi-arabia-lubricants-market
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Tags covid19 impact , saudi arabia lubricants market , saudi arabia lubricants market forecast , saudi arabia lubricants market share , saudi arabia lubricants market size
Last Updated April 23, 2021