Global Engine Oils

Report Overview

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This study examines the global market for engine oils. Markets covered include:

• light-duty vehicles
• medium- and heavy-duty vehicles
• transportation equipment (e.g., marine, railroad, aerospace)
• off-highway equipment (e.g., construction machinery, agricultural machinery)
• motorcycles
• other markets (e.g., manufacturing, oil and gas production, power generation)

Historical data for 2009, 2014, and 2019, and forecasts for 2024 and are provided for engine oil demand by market for six regions and 24 individual countries.

Tabular details may not add to totals due to independent rounding, and ratios may be rounded for clarity.

Impact of COVID-19 Pandemic

The COVID-19 pandemic had a major negative impact on the global engine oils market in 2020, which will result in a slower rate of growth through 2024.

The motor vehicle market was significantly impacted by the pandemic, particularly in the US and Western Europe where demand will saw double-digit declines in 2020, as:

• production of motor vehicles was significantly curtailed, limiting OEM demand for engine oils in motor vehicles
• work from home and quarantine orders limited the amount of nonessential travel and automobile use decline
• the closure of “nonessential” stores limited the transport of goods, partly restraining demand for lubricants for heavy-duty vehicles

However, larger losses were offset by the relatively strong performance of the motorcycle market, which saw moderate growth in 2020. An increase in the number of motorcycles in use globally, and the small, basic nature of most of the motorcycle parc in developing countries – which require more frequent engine oil changes – supported demand during the pandemic. As a result, demand for motor vehicle engine oil in the Asia/Pacific region fell only 5% in 2020; while demand in the Africa/Mideast region fell 6%.

Marine engine oils also saw declines, as manufacturing slowed in 2020 and port container traffic was limited. However, greater losses were prevented by growth in e-commerce in countries such as US and China, which supported engine oil demand in transportation-related markets, including marine and medium- and heavy-duty vehicles.

Demand for engine oils in the construction market – a segment of the off-highway market – was severely impacted by the pandemic. Those regions that were the least affected – most notably the Asia/Pacific and Africa/Mideast regions – have construction industries with relatively low levels of technological advancement where the ongoing uptake of engine oils in the industry helped mitigate some of the losses in 2020.

Demand by Region

Global demand for engine oils is expected to advance an average of less than 1.0% per year through 2024 to 21.5 million metric tons. The main factors that will boost demand for engine oils are:

• economic growth and the related increases in shipping, which will support demand for both industrial (marine, railroad) and automotive (medium- and heavy-duty vehicles) engine oils
• growing personal incomes enabling wider motor vehicle ownership

However, a leveling out of vehicle ownership rates and improved engine technologies – which continue to extend drain intervals – in developed regions will limit faster gains. Drain intervals will also be lengthened by the increasing use of synthetic oils due to rising technological advancements in the manufacturing sector and among the motor vehicle parc in developing economies.

Demand by Market

Through 2024, the motorcycle market is expected to see the fastest gains for engine oil, boosted by moderate growth in motorcycle ownership worldwide, in particular in developing regions. Increased shipping via roads and highways will support demand for engine oils in the medium-and heavy-duty vehicle market.

However, declines in the light vehicle market will prevent stronger growth through 2024, as motor vehicle ownership in developed economies flattens and technological advancements in engine design result in longer fill intervals. Additionally, demand will be limited by the growing sales of electric vehicles, primarily in Western Europe and China, and minor gains in overall manufacturing activity in developed regions.

Medium & Heavy Motor Vehicles

All regions except for North America and Eastern Europe are expected to see growth, with gains boosted by the increasing amount of shipping via roads and highways that accompanies economic expansion, in particular in the Asia/Pacific region.

Although medium- and heavy-duty vehicles are a significant market for engine oils in North America, due to the large and important transportation market for both goods and passenger travel, demand is expected decline nearly 1.0% yearly through 2024 as fill intervals in the region continue to lengthen and medium- and heavy-duty vehicle production declines slightly. Though increasing numbers of electric medium- and heavy-duty vehicles will be introduced to the market, their share of the vehicle parc is expected to remain low and they will have a limited impact on engine oil demand over the forecast period. Western Europe will fare slightly better, with gains supported by moderate increases in production in France.