Online sales and heavy trucks to drive China’s HDMO market
Demand for heavy duty motor oil (HDMO) in trucks in China is estimated to increase at a compound annual growth rate (CAGR) of 0.6% through 2022, based on the ‘most likely’ scenario in a recently published report from Kline. In particular, the heavy truck fleet is estimated to show 5% to 7% annual growth through 2022, and will drive demand.
Heavy trucks consume more HDMO than other trucks in one oil change, causing the average HDMO consumption per oil change to also increase, explains Kline. Meanwhile, the improving technology of truck engines to meet with the latest emission standards will prolong oil drain intervals (ODIs). The positive impact from future truck fleet growth on HDMO demand will be largely offset by gradually extending ODIs and a declining bus fleet, which is expected to fall due to competition from high-speed railways and underground railways.
Meanwhile, as Chinese truck owners can buy HDMO at lower prices online, sales through independent workshops are expected to be negatively impacted by continued growth in online sales.
In addition, tightening emission standards are expected to accelerate in China, helping to phase out old vehicle models that are mostly produced by domestic OEMs (original equipment manufacturers). The Euro 6 emission standard is expected to be enforced in 2020 for consumer vehicles (light vehicles) and commercial vehicles (light trucks). As for heavy trucks, the emission standard is still under discussion and is expected to be enacted by mid-2019.