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March 23, 2018

Volume 7 Issue 3

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Thailand Shell Expands Lubricant Business

Shell Co. of Thailand plans to increase its number of automotive oil change outlets and significantly raise lubricant sales by 2025 as the local lubricant market continues to grow.

The company will increase the number of Shell Advance Motor Care Express locations for motorcyclists from 150 to 200 by the end of this year and will add 10 outlets this year to its Helix Oil Change chain, which currently numbers 350 outlets.

Shell Thailand’s oil change outlets are located at petrol stations that may also offer food and delivery services like Kerry Express, A&W Restaurant and Deli Cafe. “Each site has different customer demand, and we will provide the offering based upon customer need in each location,” Ornuthai Na Chiangmai, executive director of Shell Co. of Thailand, told Lube Report.

“Shell does consumer research every year, and we use this information to drive our strategy to support customer’ demand,” she added.

The company aims to increase non-fuel products sales in Thailand – including lubricants – to 50 percent of outlet sales in the country by 2025, up from 20 percent.

The Thai lubricant market shrank two consecutive years before rebounding in 2016. According to the latest statistics released by the Ministry of Energy Business, engine oil sales jumped 11.9 percent to 326,000 metric tons in 2016. Domestic sales accounted for 81 percent and exports for the remainder of those sales.

In 2016, 4-stroke motorcycle oil meeting Japanese Automotive Standards Organization standards accounted for 20,000 tons in sales volume, or more than double the 9,000 tons sold in 2014.

Thailand’s automotive and industrial sectors are expected to grow this year. “We project the Thai market to increase this year, supported by the expiry of the first-car buyer scheme, strong exports and [a strong] tourism sector, and large public infrastructure investments – in particular in the Eastern Economic Corridor project – leading to strong private investment,” said Titikorn Lertsirirungsun, Asean manager at LMC Automotive, a United Kingdom-based  automotive market intelligence company.

The Eastern Economic Corridor project, started in January this year, covers three Eastern provinces: Rayong, Chonburi and Chachoengsao. With a total area of 13,285 square kilometers, the mega-project is expected to attract investments of U.S. $50 billion for the next five years.

The first-car buyer scheme offers a tax rebate but prohibits resale or transfer for five years. The program ended in September 2016.