MUMBAI – Indias tractor market is the worlds largest, and some analysts say it will continue expanding at double-digit rates for the foreseeable future. It should come as no surprise, then, that demand for tractor lubricants is forecast to grow at healthy rates for the next several years.
Gulf Oil Corp. Ltd. President and Chief Executive Officer Ravi Chawla said the market is also shifting toward lighter products and greater penetration of genuine and tractor manufacturer co-branded lubes.
This is a growing market, and it presents a sizable opportunity for all, Chawla told the ICIS Indian Base Oils & Lubricants Conference on April 29.
Chawla acknowledged that Gulf has not been a leading supplier in Indias agricultural lube market, but the company recently conducted a large study of the market, on which his presentation was based. The company estimated that India consumed 120 million liters of tractor lubricants in 2013 – a volume that accounted for most of agricultural lube demand. Engine oils make up 49 percent of tractor fluid demand, Chawla said, as do gear and transmission fluids. Greases and other products account for the remaining 2 percent.
In order to protect their tractors, original equipment manufacturers have been shifting their engine oil recommendations toward performance-specified fluids, Chawla said. Engine oils meeting API CI-4 or CI-4 Plus are replacing oils of CF-4 and earlier specs – both because they provide longer drain intervals and because they are needed in tractors complying with the latest Trem IIIA emission norms.
The market is also quickly moving to lighter engine oils. During the 2010-11 fiscal year, 70 percent of tractor engine oils were 20W-40 multigrades. Their share decreased to 55 percent in 2013-14 and is forecast to come down to 33 percent by 2017-18.
Chawla said there will also be a multifold increase in demand for universal tractor transmission fluids as all OEMs are shifting to oil-immersed brakes for tractors of more than 40 horsepower, the fastest-growing category of the industry. But universal fluids also present a challenge, he said, noting that there is no uniform fluid specification applicable across the industry. Tractor designs are so diverse that developing such a specification is a tall task.
Tractor purchases in India numbered 540,000 in 2013, accounting for one third of global demand, but there is still room for growth. The nation has 22 tractors per 1,000 hectares, which is low considering the prevalence of small land holdings. The United States has 26 tractors per 1,000 hectares, and China 28.
In India, more than 80 percent of tractor owners have just one tractor, and tractor usage averages 15 to 20 days per month, more during harvest seasons. An estimated 40 percent to 50 percent use tractors for haulage and other non-agricultural uses, and 80 percent to 85 percent go to independent workshops for oil changes. Fifteen to 20 percent go to OEM-authorized workshops.
Average drain interval stands at about 250 hours, and mechanics influence 45 percent to 50 percent of purchase decisions, while the rest are influenced by retailers and friends, Chawla said.
Mahindra Group is the leading tractor supplier, with 41 percent of the market, followed by Tafe-Eicher with 25 percent, Escorts 11 percent, Sonalika 10 percent, John Deere 6 percent and New Holland 5 percent.