As with last month's View, Europe continues to provide some positive economic indicators. While many countries are still suffering from the fall-out of the economic turmoil of the last couple of years, the situation has clarified further in central Europe with all the signs of a V shaped recession. For example, the German economy is now forecast to grow at 3.6% this year according to KfW, the Government owned bank.
Evidence is emerging in a number of other ways, particularly in the automotive sector. VW is expected to reach 6.3m vehicle sales this year, with profits for the first half already up threefold to €1.8bn. Daimler Trucks' sales improved 33% in the last year and 65% in August alone, an indicator that the capital goods cycle is moving into positive territory. World trade is forecast to grow by 13.5% according to the WTO (World Trade Organisation the fastest rate since 1950. If this continues, a double dip recession looks increasing unlikely.
This is good news for most markets, but especially positive for the lubricants industry which supplies the automotive market. For those close to the German economic hub we can expect to see strong performance, such as the one reported by Fuchs. In the first 6 months Fuchs' sales grew by 23% overall, driven by its Asian business which accounted for 34%. Profits have strengthened too.
This remarkably consistent with the gdp response model Fuchs and OATS discussed in early 2009.
So where next? Our latest White Paper, kindly provided by RPS Energy, examines the longer-term role of in-house lubricants manufacturing and the tensions between manufacturing and marketing.
With the aftermath of the recent economic crisis still top of mind in the industry, lubricants companies are faced with examining where the potential next wave of efficiency, opportunity and strategy may develop in the industry.
What makes interesting reading is the way industry leaders seem to focus on sales effectiveness, pricing and channel-to-market strategy. OATS has regularly advised on these aspects of the lubes industry and has been able to make a real contribution in these areas. In fact, we are developing even more advanced web solutions to reach new channels so, as always, please don't hesitate to contact us to discuss your requirements. And, if you have any news or comments you can reach us at bulletin@oats.co.uk.
Sebastian Crawshaw, Chairman OATS