China's lube market structure changes the high-end brand game into a theme

“The rapid development of China's lubricants market has become an arena for foreign oil companies to compete with each other. The game between national brands and foreign brands in the high-end market will be the main theme of China's lubricant industry for a long period of time.” China's lubricating oil companies need to expand their national brands and strive to win business battles in the lure of the lube market.

In 2012, the pattern of China's lubricants market is quietly changing. After experiencing rapid growth for more than a decade, China's lubricant industry has experienced a slowdown in growth in 2011. The annual output was 8,265,500 tons, a decrease of 325,000 tons from 2010, and the first time there was a negative growth. However, although the overall growth rate has slowed, market competition has become more intense.

What causes the slowdown in the total amount of lubricants? The relevant experts believe that the world's political structure is constantly changing, causing frequent fluctuations in the international oil market, and the lube market has entered a high-cost era. With the adjustment of petrochemical-related industries and the introduction of relevant laws and regulations, the elimination of baptism in the industry becomes inevitable. The method of competing for the market by low-end product price wars is no longer applicable. At present, some SMEs have faded out or have stopped production and entered dormancy.

At the same time, the construction of major projects identified in the “Twelfth Five-Year Plan” in China will continue to stimulate rigid demand for industries such as construction machinery manufacturing, transportation, and logistics and transportation. From the perspective of the country’s macroeconomic policies, the increase in domestic demand and basic construction investment will provide a huge consumer market for the lubricant industry. The environment and potential of domestic automotive rigid demand are still there. In 2012, the Chinese auto market will maintain a long period of growth, and at the same time, it will also greatly stimulate the demand for the automotive lubricant market.

At present, China's huge lube oil market has attracted many new foreign brands to enter. Russia, Germany, South Korea and other countries' lubricant companies have entered the Chinese market, is from south to north, and strive to open up the high-end lubricant market. As a leading brand of foreign capital, Shell continued to increase its investment in China in 2011. In addition to newly built and expanded lubricant production capacity, the Lubricant Technical Service Center established in Zhuhai was also recently launched. The year 2012 will be Shell's strength.

The national brand is also doing its part in the market competition. Kunlun and Great Wall are still the preferred brands for consumers, and they firmly control the market share of domestic lubricants by 60%. In 2012, these two major national brands are achieving basic and brand strengths through 夯, closely following the trend of development and competing against foreign brands in the high-end market. CNOOC's annual production capacity of 600,000 tons of lubricants in Taizhou has undergone two years of construction. It will soon join the war in 2012 and become a strong team in the Lubricant National Team.

In addition, the domestic private brands are also constantly making efforts to rush to the high-end market and occupy a place, the situation in the low-end market scattered, chaotic, small, the first obvious change, private brands will soon brewing truly can compete with foreign brands, national brands battlefront Leader. In the past few years, its own brands such as Anmei Lubrication, Dongfeng SG, Jiangsu Longxi, and Lake have developed rapidly. It is reported that by 2012, Dongfeng SG's total production capacity will reach 1 million tons. The concentration of these various strengths will give a strong impact on the Chinese lubricants market.

“Although the market competition is fierce, lubricant companies based on branding and specialized operations have effectively solved the industry's haze, and they have continued to go upward, achieving sustained and steady growth, and the proportion of high-end lubricants from the past. 20% to 35%, experts believe that due to the social needs of energy saving and environmental protection, as well as advances in automotive technology and the upsizing and refinement of industrial equipment, high-end lubricants have a broad market space, with high-end models and natural gas With the active promotion of green fuels, sales of high-end oil products will increase.

“When a company develops to a certain degree, or there are too many destabilizing factors in the industry, it sometimes becomes an expedient measure to withdraw from it or make a reasonable transition. At present, the pressure on the survival of the industry is still increasing, and many companies have begun to seek new ones. Breakthroughs, who can adhere to the end, who is the biggest winner. No one brand is strong enough to be challenged, and no brand is weak enough to compete.” Yan Guofei, director of Lubrication Brand, Anmei said.

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