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In-Depth Analysis Of The Covid-19 Impact On Brazil Lubricants Industry: Ken Research

07-16-2020 12:21 PM CET | Logistics & Transport

Press release from: Ken Research

In-Depth Analysis Of The Covid-19 Impact On Brazil Lubricants

The global outbreak of the Covid-19 virus has led to massive disruptions in all industries, especially with sectors including travel, hospitality, and automotive. The looming public health crisis has claimed over 530 thousand lives globally as of 6th July 2020 and apart from that, it continues to pose a threat to the lives, livelihoods, and businesses across the world.

Brazil is the second-worst Covid-19 hit country in the world, only after the United States with the number of cases reaching ~1.6 million. Brazil’s GDP contracted by 1.5% in the first quarter of 2020 as against in the last quarter of 2019. The closure of establishments, manufacturing units, industries, etc due to the imposed lockdown, has adversely impacted the Brazilian economy. The oil & gas industry as well as the lubricant industry is badly hit due to plummeting demand. The state-owned oil company ‘Petrobras’ has reduced the operation levels in its 13 domestic refineries due to reduced demand for oil. The demand for base stocks including API Group I, II & III oils has also significantly gone down due to a reduction in demand for finished lubricants.

Effect on Automotive Lubricants Demand in the First Half of 2020: The imposed lockdown in the country and the social distancing norms have severely impacted the lubricant demand in the country. The total sales of both automotive & industrial lubricants combined, declined by more than 40.0% in April 2020 as compared to April 2019. Companies such as ‘Cosan’ reported an approximately 50.0% decline in lubricant sales in the weeks of May-June, 2020. Stay-at-home orders amidst the pandemic slashed the sales of passenger car & motorcycle engine oils by ~69.0% while the consumption of heavy-duty diesel engine oils declined by ~51.0% in April 2020 as opposed to the same period in 2019. Air travel has come down to a fraction of normal levels which is negatively impacting the demand for aviation lubricants in the country. The sales of automotive lubricants were salvaged by fuel stations and supermarkets that continued to be operational during the lockdown.

Effect on Industrial Lubricants Demand in the First Half of 2020: Temporary closure and shutdown of industrial units and manufacturing facilities in the country lead to plummeting demand for industrial lubricants. The total industrial production in the country declined by ~27.0% in April this as compared to the same period in 2019. Automotive production including cars, light commercial vehicles, trucks & buses witnessed a record decline of 99.0% in April 2020 as compared to the previous month. All major industries in the country such as machinery & equipment, metallurgy, plastics, etc. bore the brunt of the pandemic with machinery & equipment industry taking the worst hit with a decline of more than 30.0%.

Temporary & Long-Term Shifts in the Business Practices: The demand for automotive lubricants including aviation is expected to remain low throughout 2020 due to low levels of personal travel and vehicle owners delaying oil changes. The demand for heavy-duty diesel engine oil is however expected to recover in the second half of the year with increased activity in the e-commerce and logistics sectors and to support commercial supply chains with relaxations in mobility restrictions. The longer distances traveled by these trucks in supply and delivery operations are likely to keep up the demand for heavy-duty diesel engine oils, which is anticipated to be a focus area for all major lubricant producers in the country. The ease in the lockdown and picking up of industrial production is expected to increase the demand for industrial lubricants and lead to the shifting the focus of lubricant producers towards the segment.

The industry is expected to witness steady recovery from 2021 onwards and the sales volume reaching pre-COVID levels in the next few years. In the longer run, lubricant manufacturers are expected to shift towards online sales channels including e-commerce platforms, online marketplaces, and investing in an official online store, particularly for automotive lubricants, which accounts for the majority of the lubricants sales volume in the country. As a result of the Covid-19 pandemic, online buying is expected to dominate the buying preferences of consumers in the future. Strategic partnerships with independent & franchisee workshop owners, spare part stores as well other stakeholders in the industry is expected to lead the industry to recover and boost lubricant sales volume in the future. This would be coupled with a focus on higher-quality lubricants, the introduction of lubricants for hybrid & electric vehicles, and continued investment in research & development for introducing innovative product solutions in the market. Basis all these factors, the Brazil lubricant market is expected to grow at a CAGR of 3.2% on the basis of sales revenue during the forecast period 2020-2025.

For More Information on the research report, refer to below link: -

Key Segments Covered: -
By Origin of Lubricants (Volume in Kilo Tons & Value in BRL Billion)

By Type of Lubricant (Volume in Kilo Tons)
Automotive Lubricants Market

By Type (Volume in Kilo Tons)
Passenger Vehicle Motor Oil
Heavy-Duty Diesel Engine Oil
Gear Oils
Transmission Fluids
Hydraulic Oil

By End-Users (Volume in Kilo Tons)
Commercial Vehicles
Passenger Cars
Motor Cycles

By Distribution Channels (Volume in Kilo Tons)
OEM Workshops
Supermarkets & Spare Part Shops (including Dealers & Distributors)
Unorganized Workshops
Industrial Lubricants Market

By Type (Volume in Kilo Tons)
Hydraulic Oils
Industrial Gear Oils
Transformer Oils
Turbine Oils
Compressor Oils

By End-Users (Volume in Kilo Tons)
Engineering Equipment
Power Generation
Iron & Non-Iron Production

By Distribution Channels (Volume in Kilo Tons)
Direct Sales
Companies Covered: -
Petrobras Distribuidora SA
Iconic Lubrificantes SA
Cosan Lubrificantes E Especialidades SA
Shell Brasil Petroleo LTDA
Petronas Lubrificantes SA
YPF Brasil Comercio de Derivados De Petroleo LTDA
Castrol Brasil LTDA
Total Brasil Distribuidora LTDA

Key Target Audience
Lubricant Manufacturing Companies
Lubricant Importing Companies
Additive Manufacturing Companies
Original Equipment Manufacturers
Consultancy Companies
Industry Associations
Regulatory Bodies

Time Period Captured in the Report: -
Historical Period – 2014-2019
Forecast Period – 2020-2025

Key Topics Covered in the Report: -
Economic & Geographical Overview of Brazil
Target Addressable Market for Automotive & Industrial Lubricants
Trends and Growth Drivers in the Industry and Challenges Faced
Brazil Lubricants Market Size and Segmentations, 2014 - 2019
Ecosystem and Value Chain of Lubricants Industry in Brazil
Industry SWOT Analysis and Lubricant Production Scenario
Customer Decision Making Parameters
Cross Comparison between Major Players and Company Profiles & Product Portfolios
Future Market Size and Segmentations, 2019-2025F
Covid-19 Impact on the Industry & the Way Forward
Analysts’ Recommendations

Related Reports by Ken Research: -

Contact Us: -
Ken Research
Ankur Gupta, Head Marketing & Communications

Ken Research Pvt. Ltd.,
Unit 14, Tower B3, Spaze I Tech Business Park, Sohna Road, sector 49 Gurgaon, Haryana - 122001, India

Ken Research is a Global aggregator and publisher of Market intelligence, equity, and economy reports. We provide business intelligence and operational advisory in 300+ verticals underscoring disruptive technologies, emerging business models with precedent analysis, and success case studies.

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