By APA Bureau:
The UK- headquartered Castrol is the world’s leading manufacturer, distributor and marketer of premium lubricating oils, greases and provider of related services to automotive, industrial, marine, aviation, oil exploration and production customers. The Indian arm of the company, Castrol India Limited, is leveraging its global expertise to meet the BS-VI norms which will be effective in the country from April 2020.
“The main change we envisage in India is the transition to BS-VI in 2020. All OEMs are getting ready for this by producing fuel-efficient engines. We are working with our OEM partners on new products to meet the approaching BS-VI emission legislation changes in India, leveraging our global experience of similar journeys in other regions,” Omer Dormen, Managing Director, Castrol India Limited, told AutoParts Asia.
Castrol operates directly in over 46 countries and employs approximately 7,500 people worldwide. In nearly 74 other countries, it is represented by third-party distributors who market and sell the products locally. The delivery network extends throughout 120 countries, covering 800 ports and partnering with over 2,000 distributors and agents. Castrol India is one of the leading automotive and industrial lubricant manufacturing and marketing companies in India. The company has been present in the country for over 100 years.
The efforts to meet strict emission norms would make engines more compact, more fuel efficient and run hotter. “These would add more stress on lubricants in terms of thermo-oxidation stability, piston cleanliness and evaporation loss. We would see use of lubricants which are synthetic and of lower viscometrics to combat these effects. The same oil also needs to provide dependable wear protection for the hardware in these lower film-strength formulations while delivering crankcase performance under high severity operating conditions. At Castrol India, we are geared up to introduce suitable products for all market specifications which would meet the lubrication needs of each vehicle,” Dormen said.
The demand for premium products would grow faster than the overall market, especially in the automotive sector. The thinner oil segments, driven by legislation to reduce vehicle carbon emissions and improve fuel efficiency, also would have faster growth. The increasingly efficient engines that the car manufacturers are introducing are designed to run on higher technology lubricants,
Making For India
Castrol India has three manufacturing plants at Patalganga, Paharpur and Silvassa, serving a distribution network of over 105,000 retail outlets and B2B customers through over 420 distributors. It is a public limited company with 51 percent share held by BP through its wholly-owned subsidiary, Castrol Limited, and the balance by the general public.
Dormen is of the opinion that vehicle users must refer to the OEM specifications and guidelines while applying lubricants. “In India, we also need to take into consideration other factors such as road conditions and fuel that affect the working of the engine. We have strict testing protocols and we believe that we have the best in class products that provide extended drain intervals. Going forward, in some of our categories, drain intervals could increase (frequency of drain to come down) and we already have such products as a part of our innovation pipeline,” he said.
The global lubricants market is around 38 billion litres a year. The demand for lubricants is driven by vehicle sales in the developing markets like China and India. Technology advancements in the segment may reduce consumption per vehicle and see introduction of higher quality lubricants to meet new emission norms.
“In India, growth would be strong in the coming decade. In the next five years, we expect about 88 million vehicles to be added to the present numbers in India. With growth in the Indian economy, we are also expecting growth in the infrastructure and manufacturing sectors and hence we see good opportunities in the industrial and heavy-duty segments. Overall, we expect the vehicle parc to grow at 11 percent CAGR which provides an exciting opportunity for the lubricant market. Castrol India is the only lubricant company with an uninterrupted presence in the country for over a hundred years with a wide range of products servicing different needs of customers and consumers. We have consistently delivered results and successfully grown the category, with a sustained record of innovation and technology leadership. We are working towards being ready to adapt to changes in the future as well,” the Castrol India MD said.
Little EV Impact
Dormen said Castrol India does not see any big impact on the demand for lubricants from the introduction of electric vehicles (EVs) during the next 15 years. “According to the latest BP Energy Outlook, the number of cars on the road is forecast to double from 990 million in 2016 to nearly two billion by 2040, driven by rising income levels and vehicle ownership. Over the past decade, we’ve seen increase in the number of EVs on the road. This growth will continue and reach over 300 million by 2040. This means that internal combustion engines will outpace the EV growth for the next couple of decades. Meanwhile there would be many more developments beyond electric in terms of efficiency. Even the normal standard combustion engines are becoming more efficient and one of our agenda items is to support the low-carbon transition by designing products for these new engines,” he said.
Various factors affect the lubricant market, and the customers have to be quality conscious, he said. “We have been seeing high volatility in raw material costs driven by crude oil prices, supply and demand imbalances of raw materials and foreign exchange which have resulted in frequent price corrections of lubricant products. Though the cost of lubricant is a small portion of the overall maintenance cost of a vehicle, the short-term impact of these price hikes may lead to the delay of oil changes beyond recommendations or switching to sub-standard engine oils, both of which may become costly decisions in the long-run. On the contrary, we recommend the use of high-quality premium lubricants to protect the engine wear, extend vehicle life and contribute to long-term savings,” Dormen said.
Castrol India works closely with leading industry OEMs, and supplies a broad range of lubricants designed for specific operating conditions and environments. Many of its products are recommended by and co-engineered with major OEMs.