Growing Requirement of Fuel-Economy in Vehicles Fuelling The Synthetic Oil Demand
Synthetic oil is chemical compounds used to lubricate or separate two moving parts and reduce friction, wear, tear, and other harmful effects. Poly alpha olefins, synthetic esters, and polyalkylene glycol are examples. Synthetic oil is derived from distillation and other refining methods used to refine crude petroleum oils. To impart the qualities, additives are mixed into synthetic oil-based fluids for some applications.
The synthetic lubricants market is expected to reach $ 5.2 Billion by 2027 at a CAGR of 3.5% during the forecast period.
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Market Drivers-Demand for Higher Fuel Economy in Vehicles
Fuel efficiency is one of the top priorities for manufacturers and consumers. Manufacturers are looking to produce more fuel-efficient cars, and consumers are demanding new fuel-efficient vehicles. As the prices of petrol and diesel increase, the demand for fuel-efficient vehicles will increase significantly. There are a variety of techniques to enhance fuel efficiency and choose suitable synthetic lubricants. Synthetic oil minimizes engine wear, provides better protection during cold, and extends oil change intervals. In cold temperatures, synthetic lubricants are more efficient, resulting in higher fuel efficiency and less engine wear. Synthetic oil improves fuel flow during cold temperatures and improves fuel consumption. Since synthetic lubricants don't contain waxes compared to conventional lubricants, these do not solidify under negative or freezing temperatures. In addition, car engine oil and gear oil do not require excess effort to circulate during engine initiation. This results in less wasted energy and improved fuel consumption.
Industry Opportunities: Growing use in the automotive sector
The demand for synthetic oils will be driven majorly by the automotive sector. As the world is experiencing renewed growth in terms of motor vehicle production and slowly returning to the pre-pandemic level of production, the demand for synthetic oil is bound to increase. As motor vehicles become lighter in weight and faster in performance, the need for high-performance lubricants is mandated for optimum engine performance. Synthetic lubricants help fuel flow quickly and efficiently in the engine, which helps in increasing mileage in the longer run. High-mileage engines require higher-grade synthetic lubricants that are costly but durable. The profit margins for manufacturers of high-grade synthetic lubricants are higher, which will further drive the growth in the market.
Challenges
Increasing demand for bio-based lubricants
Increasing demand for bio-based lubricants has been a challenge for synthetic lubricant manufacturers as a greater number of countries have strengthened their regulations regarding synthetic chemicals used in vehicles. Bio-based lubricants are used in limited applications such as building elevators, transformers, forest types of machinery, waterway equipment, and others. Bio-based lubricants have been widely used in Europe for more than a decade owing to regulations. There are many advantages such as less to no toxicity, spill remediation, and high viscosity of bio-based lubricants which are creating challenges for synthetic lubricants market.