Info!
UPDATED 1 Sept: The EI library in London is temporarily closed to the public, as a precautionary measure in light of the ongoing COVID-19 situation. From 1 September, the library will be staffed Tuesday-Thursday, meaning some services including loans of hard copy materials can resume. The Knowledge Service will still be answering email queries via email , or via live chats during working hours (09:15-17:00 GMT). Our e-library is always open for members here: eLibrary , for full-text access to over 200 e-books and millions of articles. Thank you for your patience.

COVID-19 impacts two-wheeler motorcycle sales

Two-wheeler motorcycle sales are expected to decline in 2020 due the impact of COVID-19 on low- and mid-income segments of the population in developing countries that make up a large percentage of two-wheeler users. Nevertheless, driven by the demand for individual mobility, industry growth is expected to bounce back in 2021, according to the latest analysis from Kline. As a result, the global motorcycle oil (MCO) market is projected to increase at a compound annual growth rate (CAGR) of 1.8% from 2019 to 2024.

The growth rate is lower than what has historically been witnessed, due to the disruption in demand in 2020 and contraction of China’s demand beyond 2020, says the report. North America will most likely register the highest growth in CAGR terms, but the Asia-Pacific region will have the highest volume growth. The two-wheeler population in Europe is expected to register the lowest growth due to dwindling sales and an aging two-wheeler population, along with an overall slowing in economic activity. 

The increasing commercial use of two-wheelers is primarily driving growth in the MCO market. According to Sushmita Dutta, the Project Manager of Kline’s study: ‘Using two-wheelers as taxis and courier/delivery services is increasing in almost all regions, not just in developing countries. E-commerce has been favourably affected during the COVID-19 pandemic, as people have increased their online purchasing due to the stay-at-home policy in many countries. This change in consumer purchasing behaviour is expected to be permanent, providing an impetus to further e-commerce growth and, thus, the rising use of two-wheelers for delivery services.’ Dutta adds: ‘Unlike personal-use vehicles, two-wheelers utilised for commercial transportation accumulate higher mileage and require lubrication more frequently, driving the MCO demand.’

Key product growth segments are semi-synthetic and original equipment manufacturers’ (OEM) genuine lubricants. The penetration of OEM genuine lubricants has significantly increased globally during the past few years, reports Kline. In India, the largest two-wheeler market globally, genuine oils accounted for 5–10% of the country’s MCO demand in 2019. Almost every leading OEM (Harley-Davidson, Hero, Honda, Suzuki, TVS, Kawasaki, and Yamaha) has its own brand of genuine oils. Adoption of these oils varies according to the country, depending on their popularity, pricing, and the marketing efforts of the OEMs and their authorised workshops. Genuine oils have a higher usage preference over other merchant brands in countries such as Indonesia and the US, among others.

A further penetration of genuine oils is expected to positively influence synthetics adoption, as the consumers of genuine oils are more likely to adhere to OEM recommendations. In the Asia-Pacific and South America, where most end-users of two-wheelers belong to low- or mid-income segments, synthetics will continue to face challenges. However, with the increasing sales of automatic scooters and higher-cylinder-capacity vehicles in these regions, a shift toward semi-synthetic will likely be witnessed, says Kline.

Electric vehicle (EV) penetration is increasing globally but is not seen as a significant MCO growth disrupter in the near future. This is because two-wheeler adoption volumes are very low and are insignificant in most countries. The only exception is China, which has experienced exponential growth in the electric two-wheeler population over the last five years. While the MCO market in China will continue to shrink due to this trend, markets in other countries will expand, resulting in an overall positive outlook for the global market, predicts Kline. However, the Indian government’s proposed move toward EVs, and other countries’ desire to promote EVs, could be detrimental for the industry beyond the forecast period, it says.

News Item details


Journal title: Petroleum Review

Subjects: Motorcycles - Road transport - Forecasting - Lubricants - Oil -

Please login to save this item