Economy to Boost Russias Motor Oil Consumption

MOSCOW – Russias motor oil consumption is poised to increase around 8 percent by 2022, as the countrys economy enters a period of slow growth after the post-2014 recession, according to a consultancy.

The increased motor oil consumption will be accompanied by more fuel-efficient vehicles, introduction of more stringent environmental regulations, and more use of hybrids and electric vehicles, said Tatyana Arbadzhi, head of the Moscow-based Russian Automotive Market Research.

Photo: FedotovAnatoly/iStock

Motor oil consumption is expected to increase across all of Russia’s vehicle segments – passenger car, light commercial, heavy-duty and bus – out to 2022, boosted by a period of slow economic growth following the country’s post-2014 recession.

The countrys passenger car motor oil consumption is expected to rise by 7 percent over the next five years, or from 364 million liters as of July 2017, to up to 390 million liters by 2022, she told RPIs International Lubricants Conference held here in October.

The light commercial vehicle segment will also consume an increasing volume of motor oil. Russian light commercial vehicles total consumption now is 151 million liters, and by 2022 it is expected to rise to 167 million liters, up 10.6 percent, Arbadzhi said.

The consultancy expects similar growth in the heavy-duty and bus vehicle segments. Heavy-duty vehicles could consume 362 million liters in 2022, up from 328 million liters as of July 2017, a 10.5 percent growth. Russian buses now consume 26 million liters of motor oil per year, and by 2022 will consume 29 million liters, or 11.5 percent growth, according to Ramr.

In the passenger car segment, the Russian and foreign brands face fierce competition from foreign brands, which could fare better in sales as car owners in Russia like to drive foreign automakers cars, Arbadzhi said.

Of the top 15 passenger car brands in use in Russia, almost 60 percent are foreign-branded cars, according to Ramr. In five years, foreign-branded passenger cars will increase their sales in the country, while Russian-made passenger car sales are poised to decrease.

If the ratio of the new Russian and new foreign-branded passenger car sales in 2017 was 21 percent to 79 percent [as of July 2017], this [ratio] could be 18 percent to 82 percent in 2022, Arnadzhi said.

As of July 2017 Russian foreign-branded motor oil sales reached 222 million liters, while in 2022 they could rise to 265 million liters, or a 19 percent increase. On the other hand, Russian-made motor oils could decrease its share in the countrys market from 142 million liters this year to 124 million liters in 2022, down almost 13 percent, according to the research firm.

Arbadzhi said that stringent emission control in new car models, required by regulators and original equipment manufacturers, coupled with the popularity of foreign-branded cars in Russia, would lead to wider use of foreign-branded motor oils, which are usually recommended by OEMs.

Because the heavy-duty and bus vehicle segments are dominated by Russian companies, demand for engine oils used in these vehicles is expected to favor domestic suppliers. Foreign-branded heavy-duty motor oil consumption will see a particular growth, similar to that in the car segment, Arbadzhi said.

Petrol (gasoline} engines dominate the Russian passenger car and light commercial vehicle segments, and motor oil consumption for these engines is expected to rise during the next five years, Ramr found.

Russias Lada is the passenger car make consuming the most motor oil. Lada cars consumed almost 85 million liters of oil as of July 2017, followed by Toyota at consumed 32 million liters and Nissan at 17 million liters, according to the firm.

Russian trucks are primarily powered by diesel, and motor oil consumption for diesel engines is expected to rise in the coming years. Buses primarily use gasoline, and motor oil consumption in this vehicle segment is expected to stay at the same level through 2022. The market is characterized by the prevalence of Russian brands in the commercial vehicle segment, while we expect moderate commercial vehicle gas conversion results, Arbadzhi concluded. Commercial vehicle gas conversion refers to the use of liquefied petroleum gas as fuel instead of more expensive gasoline or diesel.