The Impact of the Top 3 Strategic Imperatives on the Global Lubricants Industry

Transformative Megatrends

• Why:

  • Transformative megatrends are affecting the lubricants industry and many other areas of the chemical industry.
  • Circular economy trends and the desire to migrate away from fossil-fuel raw materials mean interest in bio-based and recycled lubricants is growing. Both can be innovative sources of high technical performance.
  • The mobility industry’s transformation through electrification will change the lubricants industry.
• Frost Perspective:
  • Investing in the development of lubricants with a lower carbon footprint and improved sustainability will be detrimental to the continued business of lubricant companies in a landscape of continuously evolving environmental regulations and standards.
  • The industry should move toward eco-friendly lubricants for specific applications, ensuring optimal performance and efficiency as petroleum-based lubricants.
  • While the exponential growth in electric vehicle (EV) sales during the forecast period will impact lubricant demand, it will also drive the development of multiple EV-compatible fluids.

Disruptive Technologies

• Why:

  • In harsh environments where bearings face challenging conditions in applications such as construction and agricultural equipment, traditional metallic bearings require heavy greasing. Improper lubrication can lead to premature failure.
  • Lubrication-free polymer bearings are emerging as a promising solution. For example, igus GmbH offers special maintenance-free polymer bearings. These alternative plastic bearings are self-lubricating and function in dry conditions, preventing dirt buildup and reducing maintenance costs.
• Frost Perspective:
  • This innovative approach aligns with the trend of seeking cost-effective and efficient solutions in heavy-duty industrial applications.
  • By eliminating the need for continuous lubrication and offering superior performance in adverse conditions, polymer bearings will provide a compelling alternative to traditional bearings.

Innovative Business Models

• Why:
  • Lubrication-as-a-Service (LaaS) is an innovative model changing how companies handle machinery lubrication in line with the trend of service-based offerings over traditional product-centric approaches.
  • LaaS often includes real-time or continuous monitoring of an equipment’s lubrication needs. Sensors and Internet of Things technology can track factors such as temperature, vibration, and oil quality, ensuring the provision of lubrication exactly when and where it is needed.
• Frost Perspective:
  • While the LaaS concept is promising for end users, as it reduces resource consumption and improves efficiency, it challenges traditional oil manufacturers by potentially reducing the overall demand for lubricants.
  • Such models have been gaining great acceptance in the wider chemicals and materials industry. For instance, in November 2023, Henkel announced its partnership with the protective maintenance provider, Nanogrease Solv Corp. A lubricant company that does not develop solutions based on the LaaS model risks becoming obsolete.

Scope of Analysis

• Lubricants’ typical use is to reduce friction between interacting components, serving a crucial function in preventing equipment malfunctions and operational disruptions across diverse industries.
• This study examines the global lubricants industry from product and end-user perspectives. It includes lubricants for major end-user segments, such as passenger vehicles, on-road commercial vehicles, off-highway construction equipment, and the industrial sector.
• The study represents an assessment of the current status and future prospects of the global lubricants industry. It assesses the impact of the supply chain, sustainability, regulations, and product innovation on the industry.
• The study considers volumes and revenues generated for lubricants from 2019 to 2030 for each of the end-user segments. Revenues are recorded at the manufacturer level.

Competitive Environment

Key Competitors

• The prevalence of digital channels over traditional banks and insurance brokers, the existence of several online aggregators, and the sharing of client experiences on social media have all had a significant impact on consumer behavior.
• Insurers have used digital technology to automate a wide range of insurance processes, enabling smoother points of sale, real-time decision-making, and straightforward claims processing.
• Technological advancements will expand UBI portfolios and enable more customized fleet solutions. Data sourced from telematics devices will provide detailed information about accident reconstruction and stolen vehicle recovery, making for an easy claims process.
• Car connectivity and advanced technologies, such as 5G connections, have paved the way for smartphone-based UBI products. Smartphones will emerge as a broad platform for fleet UBI solutions.
• The mobility sector was greatly affected by the COVID-19 pandemic. Driving restrictions impacted drivers and insurance providers, which made customers reconsider underutilized automotive insurance and switch to digital plans.
• Insurtech companies have a competitive edge in offering scalable and customized UBI solutions to the European fleet industry.
• The surge of the COVID-19 pandemic pushed automotive insurance companies to offer customized policies to their drivers. Digital policies will be the key solution replacing traditional policies.
• Many insurance companies are evolving in Europe to offer digital insurance services by strategically partnering with ecosystem providers, telematics service companies, and more.
• Traditional insurance companies dominate the industry. They provide limited solutions in areas where consumers spend a lot of money on car insurance, but there are methods to minimize common prices.
• As the number of EVs in European fleets grows, digitalization and UBI rules will become increasingly important.
• The insurance industry witnessed a tectonic shift after the COVID-19 pandemic. Europe is witnessing rising industry convergence, with digitalization taking the lead.
• Tech start-ups and seasoned tech companies have an opportunity to form partnerships or enter into M&As to offer scalable UBI solutions and platforms to serve the EV fleet segment.
• This study analyzes UBI in leasing, rental, and corporate-owned fleets in European countries, including France, Germany, Italy, Spain, the United Kingdom, and the rest of Europe. It emphasizes UBI products’ growth and scalability and their use in fleet companies.
• The study also examines current and future UBI trends in leasing, rental, and corporate-owned fleets as well as future growth opportunities.
• Furthermore, the study examines and projects subsegments to offer a comprehensive view of the overall industry.
• UBI’s growth in Europe is directly attributed to the adoption of telematics technology. Telematics devices installed in fleet vehicles collect data about driving style and behavior, including speed, acceleration, braking, and mileage, which affect vehicle and driver safety.
• The collected telematics data from fleet management companies allows insurance companies to assess risk more accurately and offer tailored insurance premiums.
• ALD Automotive
• Alphabet
• Arval
• Athlon
• Avis
• Europcar
• Free2Move
• Hertz
• LeasePlan
• Targa Telematics
• Octo Group S.P.A
• Insurance & Mobility Solutions (IMS)
• Lexis Nexis
• Scope Technologies
• TrakGlobal
• Cambridge Mobile Telematics (CMT)
• Quartix
• Trakm8
• Allianz
• Aon
• AXA
• Admiral Group
• Aviva
• RSA
• By Miles
• Groupama
• Generali
• Unipolsai Assicurazioni S.P.A
• Daimler
• PSA Group
• Renault
• BMW
• Ford