Motorcycle oils account for roughly 10 percent of Indias 2.4 million metric tons of annual lubricants consumption. Two-wheelers make up three-fourths of Indias roughly 155 million vehicles, Dutta said.

Meanwhile, Chinas consumption of MCOs equals around 90 percent of Indias – and its declining, Dutta told Lube Report Asia.

The two-wheeler population in India is expected to grow at 7 percent to 9 percent annually in the next five years, and as the lubricants consumption is directly proportional to vehicle population, we expect similar growth rates for the ensuing market going forward, said Dutta, a project manager for Klines Energy Practice.

Sales of two-wheelers, which include motorcycles, scooters and mopeds, reached around 20 million units in the 2016-2017 financial year, up from about 12 million units in 2010-2011, according to the Society of Indian Automobile Manufacturers. Production totaled about 20 million units, up nearly 6 percent from the prior year.

There will be an increase in sales of both scooters and premium motorcycles, and original equipment manufacturers will continue boosting sales efforts in rural areas, Dutta projected. Scooters are the fastest-growing type of two-wheelers, while mopeds are declining.

Traditional motorcycles account for over 75 percent of Indias more than 100 million two-wheelers, Kline found. Engine capacity for the majority of the market falls between 100 and 250 cubic centimeters. Four-stroke engines dominate, accounting for up to 85 percent of the market, while the two-stroke segment is shrinking.

In terms of volume, engine oil is the largest category of lubricants consumed by two-wheelers, followed by fork oil, suspension oil, grease and chain oil, according to Kline.

Of viscosity grades, 20W-40 is currently the leading category of engine oils, followed by 10W-30 and 10W-40, Dutta said. However, 10Ws are the fastest-growing grades because now many OEMs are recommending lighter-viscosity oils to meet Indias emission regulations.

The motorcycle oils market in India is moderately fragmented and highly competitive, Dutta said. The top six suppliers – which include three national oil companies, Bharat Petroleum Corp. Ltd., Hindustan Petroleum Corp. Ltd., and Indian Oil Corp. Ltd., as well as private players including BPs Castrol India Ltd., Tide Water OilCo. and Gulf Oil Lubricants India Ltd. – together account for roughly 70 percent of the market, she added. The remaining 30 percent is divided among other regional players, international companies and OEM genuine oils suppliers.

Some of the key lubricant brands in India are Mak, Castrol, Servo, HP, Veedol, Gulf Oil, Valvoline, Elf, Shell, Savita, Idemitsu, Motul and Mobil.

National oil companies and Castrol will continue to be the main players in the MCOs market, but going forward we think the competition in this space would become even more intense with more international companies entering the market to get a piece of this high-volume, fast-growing market, Dutta said, adding that Petronas Lubricants International seems to be quite ambitious and could grow into a mid-tier supplier going forward.

She cautioned, however, that increases in oil drain intervals, decreasing two-stroke vehicle sales and higher use of semi-synthetics and synthetics could restrain growth. We expect that the drain intervals would continue to grow, and this would have a negative impact and will dampen the overall MCOs demand growth, she added. The reduction of two-stroke vehicles wont hamper growth much, as theyll replaced by four-stroke vehicles.