With automotive lubricant demand rising from 2.6 million liters (in 2015) to 4.1 million liters (in 2021), global and regional manufacturers are taking notice of the Vietnam market. How can brands win in this market? Leon Perera, Chief Executive Officer of Spire Research and Consulting, shared his insights on key trends in the Lube Report Asia magazine.
With many players competing in the Southeast Asia Market for motorcycle lubricants, leaders will be determined by their success in the large and fast-rising markets of Indonesia and Vietnam. These two countries account for over 80% of the region’s total motorcycle population. A few brands that stand out are Petronas, Shell, BP Castrol and Pertamina.
Leon commented that while Vietnam’s short-term growth is driven by motorcycle lubricants, long-term growth is expected to come from car lubricants as middle-class Vietnamese trade up to cars.
Vietnam’s attractive lucrative market is dominated by mineral engine oil due to price. However, synthetic and semi-synthetic engine oil saw rapid growth with a combined market share of 41% (in 2015), which is expected to rise to 56% by 2021. In early 2016, Vietnam ceased tariffs on lubricants from Association of Southeast Asian Nations member states, making the market much more competitive but also fueling growth.