China's lubricant market has quietly changed

"The rapid development of China's lubricants market has become an arena for foreign oil companies to compete with each other. The game between national brands and foreign brands in the high-end market will be the main theme of China's lubricant industry for a long time." At the Fourth Summit of the China Lubricants Association held in Shijiazhuang, General Secretary Ma Wenshi stated that Chinese lubricants companies need to explore how to expand their national brands and win the battle to grab a big cake in the lube market.

In 2012, the pattern of China's lubricants market is quietly changing. After experiencing rapid growth for more than a decade, China's lubricant industry has experienced a slowdown in growth in 2011. The annual output was 8,265,500 tons, a decrease of 325,000 tons from 2010, and the first time there was a negative growth. However, although the overall growth rate has slowed, market competition has become more intense.

What caused the slowdown in the total amount of lubricants? Ma Wenshi analyzed that the world's political structure is constantly changing, causing frequent fluctuations in the international oil market and the lube oil market has entered a high-cost era. With the adjustment of petrochemical related industries and the introduction of relevant laws and regulations, the elimination of baptism in the industry becomes inevitable. The method of competing for the market by low-end product price wars is no longer applicable. At present, some SMEs have faded out or have stopped production and entered dormancy.

At the same time, the construction of major projects identified in the “Twelfth Five-Year Plan” in China will continue to stimulate rigid demand for industries such as construction machinery manufacturing, transportation, and logistics and transportation. From the perspective of the country’s macroeconomic policies, the increase in domestic demand and basic construction investment will provide a huge consumer market for the lubricant industry. The environment and potential of domestic automotive rigid demand are still there. In 2012, the Chinese auto market will maintain a long period of growth, and at the same time it will also greatly stimulate the demand for the automotive lubricant market.

At present, China's huge lube oil market has attracted many new foreign brands to enter. Russia, Germany, South Korea and other countries' lubricant companies have entered the Chinese market, are from south to north, and strive to open up the high-end lubricant market. As a leading brand of foreign capital, Shell continued to increase its investment in China in 2011. In addition to newly built and expanded lubricant production capacity, the Lubricant Technical Service Center established in Zhuhai was also recently launched. The year 2012 will be Shell's strength.

The national brand is also doing its part in the market competition. Kunlun and Great Wall are still the preferred brands for consumers, and they firmly control the market share of domestic lubricants by 60%. In 2012, these two major national brands are building a foundation and brand strength through Yankee, closely following the trend of development and competing against foreign brands in the high-end market. CNOOC's annual production capacity of 600,000 tons of lubricants in Taizhou has undergone two years of construction. It will soon join the war in 2012 and become a strong team in the lubricants national team.

In addition, domestic small and medium-sized brands are constantly making efforts to rush to the high-end market and occupy a place. The situation of scattered, chaotic, and small in the low-end market has clearly changed for the first time. Small and medium-sized brands are about to brewing truly competing with foreign brands and national brands. Leader. In the past few years, Dongfeng SG, Jiangsu Longxi, Lake and other private brands have developed rapidly. It is reported that by 2012, Dongfeng SG's total production capacity will reach 1 million tons. The concentration of these various strengths will give a strong impact on the Chinese lubricant market structure.

"Despite fierce competition in the market, lubricants manufacturers with branding and specialized operations have effectively resolved the gloom in the industry, and they have continued to move upwards, achieving sustained and steady growth. The proportion of high-end lubricants has grown from the past. From 20% to 35%, industry experts believe that due to the social needs of energy saving and environmental protection, as well as advances in automotive technology and the upsizing and refinement of industrial equipment, high-end lubricant products have a broad market space, with high-end models and natural gas With the active promotion of green fuels, sales of high-end oil products will increase.

“When a company develops to a certain degree, or there are too many destabilizing factors in the industry, it sometimes becomes an expedient measure to withdraw from it or make a reasonable transition. The pressure on the industry’s survival is still increasing, and many companies are beginning to seek new ones. Breakthrough, who can persist until the end, who is the biggest winner. No one brand is strong enough to be challenged, and no brand is weak enough to compete.” A person in charge of the China Lubricants Association said.

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