1. “Demand for green fuel:” An initiative that can affect the lubricants market negatively.
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The automotive industry contributes significantly to consumption & ultimately the growth of the global lubricants market. However, as the demand for crude oil grows, so do environmental concerns. Consumers all over the world are becoming more interested in electric vehicles. Additionally, as the technology advances, the pros of having an electric vehicle will become clear. Electric vehicle adoption is expected to slow down the industry growth. According to International Energy Agency, “sales of electric vehicles have doubled in 2021 with an overall count of 6.6 million & have accounted for 10% of global car sales.” Moreover, China accounted for 3 million sales of electric vehicles in 2020, by 40% in 2019 & is expected to capture a bigger share of the market in upcoming years.
However, from a broader perspective, renewable energy can also benefit the lubricant market, the potential sub segment of the power generation market is renewable energy sector. In terms of total energy, wind power generation which uses lubricants to a large extent, currently makes up a very small portion, but, according to the world energy association, the market is expanding at the rate of 10% annually & had a capacity of 596,566 megawatts. Lubricants are thus necessary for the sector.
2.” COVID Hit:” Damage inflicted on automotive segment felt by the lubricants market as well.
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The global automotive supply industry is heavily impacted by the COVID-19 crisis, as both the production and sales of motor vehicles came to a sudden halt in most of regions. The lockdown impacted the transportation sector, resulting in the low movement of commercial and passenger vehicles across the globe. In China, according to the International Council on Clean Transportation, there was a 23% decrease in the sales volume of new passenger cars in 2020 as compared to the first half of 2019. These work stoppages led to a loss of production of millions of vehicles across the world. Moreover, as per International Organization of Motor Vehicle Manufacturers, global vehicle manufacturing dropped by 16% directly impacting the demand for automotive lubricants. All these factors negatively impacted the lubricants market during the COVID-19 pandemic.
However, as automotive, marine, chemical & oil & gas markets rebound from the pandemic shock waves, the lubricants market will also grow subsequently. The growth, however, will be steady at first & is then expected to grow at a fast pace.
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