Brand loyalty could support 4% growth to 2022 for OEM geniune oils, says Kline.
OEM lubricants - the popular choice Image: Commons |
The global analyst reports that consumers prefer OEM-brand/trademark engine oils which are exclusive to their vehicle OEM. At the same time, according to Kline, OEMs are keen to maximise that consumer loyalty by taking a greater slice of their aftermarket sales and service business. As a result, many lubes suppliers are entering into multi-year OEM contracts.
Currently, OEM genuine oils are mainly consumed by OEM-franchised workshops and dealerships for servicing new vehicles. Accounting for more than 20% of 2017 global genuine oil volume, Toyota is the lead OEM. However, consumption is projected to grow for all the major automakers.
Kline's David Tsui stated: “The traditional views of vehicle ownership are starting to give way to emerging trends such as vehicle subscription services which include all maintenance and insurance. OEMs are also investing in ridesharing which could lead to corporate owned fleets serviced by dealerships."
He added: "The majority of dealerships use genuine oil and, as more customers go back to the dealerships, genuine oil consumption will increase.”