At the ACI European Base Oils & Lubricants Summit in Budapest during the summer, Stuart Speding from RPS Energy repeated the view that: ”Regional economic growth and vehicle ownership will drive lubricants growth”. It's a viewpoint with which I and the OATS team fully agree and this can never be over-stated or over-analysed and his presentation is now available on the OATS website.
US PMI has continued to strengthen. The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 52.5 in September from 52.2 in the previous month, suggesting continued recovery there. Even the Eurozone is believed to be improving to 52.2. But the current political stand-off regarding the US Budget is creating exactly the uncertainty that the world economy does not need and we can only hope the US does not cause too much damage to the rest of the world.
In Europe the car market is down 12% with VW reporting a 17% fall in sales. However, this is in marked contrast to the UK, which has risen strongly by an identical amount, funded by low interest rates and an element of recovery. Interestingly, after a dreadful period in the summer, the global Automotive PMI forecast has also recovered strongly, with new orders rising faster than since Feb 2011, so the outlook is far from gloomy across the world.
As the manufacturing industry get to grips with the continued volatility, the automotive lubricants market is also characterised by a dichotomy. OEMS want ever-more-specific lubricants, both for first fill and to protect their aftermarket. On the other hand, lubes makers need to produce lubricants that meet a range of different vehicles in order to be able to market product profitably.
As Speding argued: "Technology is no longer a differentiator”. The key factor is now to be found in marketing. He states that engine lubricants are becoming progressively more commoditised. This is in direct contrast to the OEMS' potential threat to smaller or independent companies, where continued specification improvements are pushing up the costs of staying in the game.
At the distributor level we are seeing more multi-brand operations who need several suppliers in order to have a complete product range to support their customers. Again, the future will be all about providing services, such as B2B web sites and other support tools, that allow the distributor to perform better. This is as true in developing nations, such as Ghana, as it is for retailers and consumers in developed countries.
As the “always connected” lifestyle continues to reach more adherents, for both B2C and B2B applications, there is a growing need to be differentiated. Like lubricants, companies will need websites that standout and create their own unique market positioning whatever that may be.
As a company whose entire existence is based on transforming lubricants data, OATS is increasingly focused on implementing lubricant-based websites and mobile solutions on a global, regional and local basis. These are no longer a 'nice to have', they have become essential elements in driving the future of the lubricants industry.
As part of the job of 'practicing what we preach' we are now using social media via Twitter @Oats_Ltd, Facebook and LinkedIn to highlight new articles that appear in the Lubes Resource Centre on a daily or weekly basis. We would, as always welcome your feedback and would be just as delighted to receive this via these social media channels as through the more traditional route of e-mailing us.
Sebastian Crawshaw
Chairman and Owner, OATS