HIGH VOLUME LOW QUALITY

2016-06-20   来源：润滑油情报网 网友评论 0 条

Despite recent mixed signals, there is still plenty to get excited about with India’s economy. The middle class continues to swell, disposable income is rising and vehicle purchases are expanding at a rapid pace. This would seem to create significant opportunities in the nation’s automotive lubricant sector, and indeed demand is expected to rise in the foreseeable future.

   However, in spite of the tantalizing scale, qualitative considerations may   tone down the appetite that international lubricant companies have for India. The country may be the world’s third-largest lube consumer, but industry insiders note that inferior quality products form a large part of the market. Atul Satsangi of New Delhi-based Excell Corp. says there are several factors which make India’s lube market difficult for foreign companies.

   “First of all it is very price sensitive,” he said in an interview, “and secondly   there is the widespread problem of counterfeiting, which has been an issue for international companies.”

   In all, “the Indian [lubricant] market is estimated around 2.1 million tons and valued at approximately U.S. $3.8 billion [€3 billion] for 2011,” Satyan Gupta, senior consultant at Kline’s Gurgoan office in India, told Lubes’n’Greases. PFC Energy India said that 52 percent of total lubricant demand comes from the country’s multifaceted transportation sector, of which 60 percent is heavy-duty diesel engine oil. Industrial lubricants represent 41 percent of total demand, with close to 40 percent of that market consuming additive-free products such as transformer oils and white oils. Greases make up 5 percent     of total demand.

   India’s auto industry is on a roll, according to R.N. Ghosal, managing director of Tide Water Oil Co., who prepared a presentation for the Base Oil and Lubes Middle East conference organized in Bahrain in May by the Conference Connection and Petrosil. Ghosal was unable to attend the conference, so his paper was not presented, but the organizers released it nonetheless. Ghosal wrote that approximately 18 million vehicles were sold in India the year beginning July 2011, an increase of 11.4 percent over the previous 12 months. Government statistics buttress the assertion   : The number of drivers in India has soared from seven for every 1,000 people in 2007 to 11 per 1,000 in 2010. Going back to 2000, only 0.5 percent of Indians had a vehicle.

   India’s automobile population looks quite different from those of developed nations. Ghosal said of all the autos sold in 2011-12, nearly 14 million, or 77 percent, were four-stroke, two- or three-wheeled vehicles. In comparison, the passenger car segment amounted to just over 2.6 million units, but is expected to increase with a compound average annual increase from 11 to 14 percent. Sales of new two- and three-wheelers   will also grow, he said, but the rate will ease from 38 to 22 percent.

   India’s automotive lube market stands in stark contrast to the United States and Europe, differing in the diversity of products and the range of specifications. Ghosal noted that India also differs from the Middle East insofar that the latter does not have such a large portion of two wheelers.

   Sixty percent of the passenger car motor oil consumed in India is API SF, CC or CD, categories which are essentially obsolete in mature automotive markets such as the United States. The CC category, according to U.S.-based   API, is not suitable for use in diesel-powered engines built after 1990, while the CD category was first introduced in the 1950s.

   Four-stroke engine oils used in two- and threewheelers mostly meet the requirements of API SG or later specifications, with original equipment manufacturers generally recommending SJ. API defines SG as obsolete, while SJ was introduced for model year 2001 vehicles. The four-stroke market is India’s fastest growing lubricant segment after heavy-duty diesel engine oils, with annual growth rates exceeding 20 percent.

   Ghosal cautioned that declining vehicle utiliza-     tion and lengthening drain intervals will partially offset the growth in engine oil demand resulting from a larger vehicle population. Oil viscometrics are transitioning, he said. Owners of older vehicles commonly use SAE 20W-40 oils, but big OEMs such as Hero Motor and Honda are gradually shifting to SAE 10W-30 in India. Genuine oils are gradually becoming a major part of the growing lubricant market.

   The low quality of oils in India stems largely from the fact that automobile emissions regulations in India lag substantially behind those in Europe, the U.S. and Japan. Whereas the European union     has   imposed limits named Euro 1, 2, 3 and 4 for passenger cars and Euro I, II, III and IV for heavy-duty trucks, India dubs its regulations Bharat I, II, III and so on. For most of India, Bharat Stage II took effect in April 2005 and Bharat Stage III in April 2010, in both cases capping emissions from passenger cars, light commercial vehicles, heavy-duty trucks and two- and three-wheelers. The April 2010 regulation equates to Euro 3 caps on emissions of carbon monoxide, hydrocarbons, nitrous oxides and particulates. Euro 3 went into effect in the European union     in 2000.

   Stricter regulations have   been adopted in 13 Indian cities, with Bharat Stage III taking effect in April 2005 and Bharat Stage IV taking effect five years later. Bharat IV corresponds to Euro 4, which went into effect in the EU in 2005.

   Low-emission engine technology and a push for greater fuel efficiency will ultimately require better lubricant technology in India, according to Ghosal. Similarly, OEM concerns about engine and powertrain durability resulting from longer warranties and service intervals suggests long-drain crankcase and powertrain oils are necessary.

   As the market evolves it likely will gravitate   towards global standards, requiring Indian OEMs to iron out technical issues when redesigning lubricants. Ghosal identified wear protection, gear pitting and overall fuel economy as the most pressing issues. He said that many OEMs have introduced engine oils tailor-made for them by lube blenders who then sell the product as a co-branded oil in the aftermarket. OEMs receive a royalty on such sales.

   Kline’s Satyan Gupta thinks loyalty to OEM specifications is shortlived. He said that many heavy industrial consumers import foreign technology or purchase machinery and obtain the lubricant recom-     mended by OEMs during the warranty period. “But most of them switch once the warranty is over,” he said. Gupta also agreed that global specifications by automotive OEMs will impact the market. “Viscosities will move from 20W and 15W grades straight to 5W, bypassing 10W-40 and 10W-30 grades. The HDMO market, however, is expected to continue to stick to the heavier grades.”

   India’s fleet of commercial vehicles is the fifth largest in the world, and is divided into several subcategories. Heavy-duty tractor trailers carry payloads greater than 16 tons; medium-duty vehicles pulling 12 to 16 tons; or   light-duty with less than 12 tons. Light commercial vehicles comprise 40 percent of the market, followed by tippers – such as dump trucks – at 25 percent; multi-axle trucks at 18 percent, medium commercial vehicles at 13 percent, and   heavy-duty tractor trailers at 4 percent.

   Domestic OEMs dominate in the heavy- and medium-duty markets, Ghosal wrote, with Tata and Ashok Leyland supplying 63 percent and 28 percent, respectively. The light-duty category is divided mostly between Tata at 65 percent, Eicher at 9 percent, Swaraj at 6 percent and M&M at 5 percent. Tata recommends an API CF-4 oil corresponding to Bharat I/II and with a recommended drain interval of 18,000 km or a CH-4, Bharat II/III oil rated for a 36,000 km interval. Ashok Leyland recommends oils of similar quality with intervals of 16,000 or 32,000 km. Eicher prescribes   intervals of 20,000 and 30,000 km.

   In some respects the passenger car market appears to offer better chances for engine oil advancement. Ghosal noted that Maruti Suzuki, a subsidiary of Japan’s Suzuki Motor   Corp., is set to introduce significantly lower viscosity grades, offering a 5W-30 oil matching API SL or CF specifications and also meeting fuel economy requirements of ILSAC GF3, which North America’s International Lubricant Standardization and Approval Committee introduced in 2001. However, the recent introduction of ultra low-cost passenger cars with mass market potential such as the Tata Nano could keep a lid on rapid improvements in lubricant quality. Tata recommends an API SG grade for its entry level $3,400 vehicle.  

   Another vehicle category that merits attention is the Indian tractor market, which is the second largest in the world. The country has more than 2.1 million tractors, Ghosal said, sowing an area of 185 million hectares, and more than 70 percent of them are manufactured by domestic companies.   Annual tractor sales have more than doubled since 2004-05 and are forecast to grow between 12 to 15 percent a year. In 2011-12 nearly 500,000 units were sold. Ghosal contended that the tractor market is in transition – that although it is currently dominated by machines with 31 to 40 horsepower, signs indicate a shift to those with greater than 40 hp and an increase in the number of wet brake models used. The 31 to 40 hp category currently accounts for 49 percent of the country’s tractors.  

   On the face of it, the Indian lubricants market is growing and could offer enormous potential. Yet, the recent experience of Shell, which withdrew from a joint venture, and Chevron, which pulled out of the market in 2009, suggests a potentially bumpy ride for aspiring companies. Excell Corp.’s Satsangi said that despite the pitfalls the Indian market is still a good bet.

   “You have to be in it for the long term, stay put, find a good partner and always remember it is a volume business,” he said.   It is a point echoed by Gupta of Kline. “In the medium term there is low potential for new players, but long term there is potential as the lubricants market is expected to enjoy significant organic growth. The best strategy would be to develop some indirect presence through a marketing tie-up.”