John Sargeant and Stuart Speding, Senior Consultant and Head of Practice respectively at RPS Energy, take a long hard look at lubricants industry growth.
In examining the lubricants sales, John and Stuart question whether the perceived recovery is actually being talked up by an industry that is desperate for positive news.
While the perception may be a strong bounce back from the 2009 economic contraction, the reality may be somewhat different when the figures are examined in detail. In fact, the message is clear according to the RPS Energy Team: automotive lubricants demand is in long term decline in mature markets.
In addition to an illusion of growth, there may also have been a “honeymoon period” of above-average margins and unusually high profitability. Now the honeymoon is over and, with world markets teetering on the brink of double-dip recession, mitigating volume loss against unit margin management may not be possible second time around. This is particularly true if demand begins to falter and customer and cost-of-goods pressures are added to the equation.
According to the white paper, lubes producers and their marketeers will need to take a long hard look at their sales channels to establish how, and where, they are evolving.
