At present, the domestic market for automotive lubricants dominates with hegemony, with foreign brands playing a leading role. About 4,000 domestic lubricant companies even lost to a few foreign brands such as Meifu, Shell, and Caltex. Although they accounted for 80% of the overall market share, they only received 20% of profits.
After China opened up its lubricants market in 1992, a number of well-known foreign brands have come. In particular, after China's accession to the World Trade Organization, the tariff of lubricants has dropped from 9% to 6%. Almost all internationally renowned lubricant brands have entered the domestic market through an alliance of multinational car manufacturers.
With the continuous improvement of the people’s living standards, the domestic car consumption market continues to prosper in recent years. Last year, domestic car sales, especially private car consumption, showed a trend of “blowoutsâ€. From January to July this year, the sales volume of cars increased by 25% compared with the same period of last year. This directly stimulated the expansion of the automotive lubricants market. At present, China has become the world's third largest consumer of lubricants, with an annual consumption of nearly 4 million tons.
The huge lube oil market in China has caused domestic and foreign companies to covet. In particular, high-end oil accounts for only 30% of the entire vehicle oil market, but its profits have greatly exceeded the total profit of middle and low-end products. At present, well-known foreign brands such as Mobil, Shell, Guardians, BP, etc. account for 78% of the domestic high-end oil market share, taking away 80% of the profits of the entire automotive lubricants market, and a large number of domestic oils such as the Great Wall, Kunlun, and Unification. Although the product has an absolute advantage in the overall market share, with more than 80% of the share, it only gets one-fifth of the profit.
According to estimates by experts, there is great potential for the domestic high-end lube oil market. In the next 3 to 5 years, high-end lubricants for vehicles will grow at a rate of more than 5% per year. By 2005, high-end lubricants will account for about 50% of the total market share of vehicle lubricants.
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