The automotive oil industry underwent a dramatic shift in 2024, driven by technological innovation and regulatory action. As emissions standards became stricter and fuel economy was prioritized, automotive manufacturers turned to low-viscosity, high-performance synthetic automotive oils to help them meet their goals.
One of the key developments in 2024 was the high adoption of bio-based lubricants, which followed sustainability initiatives taken by governments and OEMs. Following a slew of Eco-friendly oil incentives, car makers were motivated to research biodegradable and high-performance fuels.
Lubricants for electric vehicles (EVs) remained in high demand amid ongoing EV penetration. However, internal combustion engine (ICE) vehicles still dominated global sales, making EVs a tiny fraction of the overall industry. As a result, large oil producers published hybrid-specific lubricants for use with mixed powertrain systems.
The industry is expected to grow steadily in 2025 with a CAGR of 2.6%, reaching up to USD 56.85 billion and beyond, giving equal priority to the demand for synthetic and bio-based oils. Furthermore, it is anticipated that nano-lubrication technologies will transform the performance parameters.
On the other hand, regional dynamics involving automotive production in China and India in the Asia-Pacific will still play a role in continued volume growth. Next-generation lubrication solutions with an emphasis on sustainability, efficacy, and longevity will dominate the industry by 2035.
Market Forecast Table
| Metric | Value |
|---|---|
| Market Size (2025E) | USD 56.85 billion |
| Market Value (2035F) | USD 73.49 billion |
| CAGR (2025 to 2035) | 2.6% |
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(Surveyed Q4 2024, n=500 stakeholder participants evenly distributed across manufacturers, suppliers, distributors, and end-users in North America, Europe, and Asia-Pacific)
Regional Variance
Convergent and Divergent Perspectives on Market Adaptation
Differentiation Strategies Among Industry Players
Alignment Across Markets
Regional Divergence
Key Variances
| Countries | Government Regulations & Mandatory Certifications |
|---|---|
| United States | The Environmental Protection Agency (EPA) regulates emissions, typically favouring low-viscosity and fuel-efficient lubricants. Technical Specs: Gasoline engine oils are API SN PLUS and ILSAC GF-6 certified. The SAE J300 is a commonly recognized viscosity classification. |
| United Kingdom | The guideline for lubricants under UK REACH Regulation Bio-based lubricants are facing more specific requirements due to the demand for carbon neutrality by 2050. ACEA standards are mandatory for automotive oils in passenger vehicles. |
| France | The product meets the standards for both the EU REACH and ACEA oil. Easing up France's aggressive low-emission vehicle initiatives has spurred demand for hybrid and EV-friendly lubricant products. Indeed, the government offers tax credits for sustainable lubricants. |
| Germany | The German Institute for Standardization (DIN) governs lubricant performance specifications. The German Institute for Standardization (DIN) approves OEM-approved lubricants following ACEA and VW 504.00/507.00 certification. Regulations around carbon capture cause knock-on effects to lubricant formulations. |
| Italy | The product satisfies both ACEA oil standards and EU REACH regulations. Tax shift for the spare on sustainable lubricants in Italy: Disposal of used engine oils as waste is regulated by the Ministry of Environment. |
| South Korea | Standards for lubricant quality in Korea are provided by the Korean Agency for Technology and Standards (KATS). The nation follows API and ACEA certifications, which promote fuel-saving oils. It also has to meet tough CO₂ emissions targets. |
| Japan | Standardization bodies such as the Japan Automotive Standards Organization (JASO) encourage standards like JASO MA/MB for motorcycle oils. Japan, however, is also compliant with API and ILSAC certifications and is moving to hybrid-compatible oils due to a higher ratio of electrified vehicles. |
| China | CNIS governs the regulatory environment for lubricant quality in China. Stringent emissions regulations set to take effect by 2025 ensure a widespread preference for low-sulphur and synthetic oils in much of the domestic industry. API and ACEA often certify high-end lubricants. |
| Australia & New Zealand | Australia's Product Stewardship for Oil (PSO) Scheme promotes recycling and re-refining of used lubricants. In New Zealand, firms like Pacific Bio Lubricants hold ISO 9001 & 14001 certifications for quality and environmental standards. Additionally, Australian manufacturers like Anglomoil have ISO 21469 certification for food-grade lubricants. |
| India | The Central Pollution Control Board (CPCB) has already implemented Bharat Stage VI (BS-VI) emission standards that require low-sulphur engine lubricants. Petrol quality is regulated by the Bureau of Indian Standards (BIS), while the Automotive Research Association of India (ARAI) certifies lubricants for OEM approval. |
The synthetic oil segment has the highest industry share in automotive oils with respect to its high performance, high viscosity control, and longer drain intervals. The synthetic-based grade is the second-most widely produced oil commodity around the world and holds about 35% of the share in the automotive oil industry.
Certain passenger cars, big trucks, and high-performance diesel engines commonly use this oil in extreme temperature conditions. Due to strict BS-VI (India) and China VI emission standards, there is a growing need for full synthetic low viscosity oils like 0W-20 and 5W-30. Semi-synthetic oils that combine both mineral and synthetic bases are progressing rapidly since they offer cost-effective enhanced performance in light commercial vehicles and two-wheelers.
Alternative fuel engines, such as CNG and hybrid vehicles, are increasingly using them, necessitating more specialized lubrication. Lubricants based on mineral oil are still being used for applications like vintage diesel and petrol engines, but that industry is being reduced as these lubricants are less efficient and have a bigger impact on the environment. Future demand will shift towards bio-based, environment-friendly synthetic oils.
By product type, diesel engine oil accounts for the maximum industry share, attributed to the wide usage of diesel-powered heavy commercial vehicles, light commercial vehicles, and off-highway vehicles. High-viscosity oils like 15W-40 and 10W-30 still stand on top among high-load duty diesel trucks, buses, and construction equipment for extreme conditions. Polished low-emission diesel engine oils with low-sulphur formulations are becoming popular due to Euro 6 and BS-VI emission industries.
The diesel segment is set to account for the highest revenue share of over 57% in 2025. Growth in the alternative fuels segment (CNG, LNG, hybrids, and EV lubricants) is the fastest. Demand is high for specialized lubricants for hybrid and CNG engines, which have added thermal stability and oxidation resistance. Lubricants for e-axles, e-transmissions, and thermal management systems are becoming increasingly popular as the EV industry continues to grow.
The passenger vehicle segment is the largest by application, due to the high consumption of synthetic and semi-synthetic engine oils. Demand for fuel-efficient, low-viscosity lubricants like 0W-20 and 5W-30, which can enhance mileage and reduce emissions, drives growth.
In developed industries, automakers are also marketing hybrid-compatible engine oils. The HCV segment is a major revenue segment, driven by the rising demand for longer drain interval lubricants, as they help in minimizing maintenance expenses.
High-performance diesel oils are in high demand for construction trucks and buses as infrastructure development is ramping up. The light commercial vehicle segment is set to generate a significant industry revenue share of around 35% in the next decade.
The two-wheeler industry is growing as well, especially across Asia-Pacific and Latin America. The popularity of JASO MA/MB-rated lubricants, particularly in motorcycles and scooters requiring high-temperature resistance, is growing.
USA automotive oil consumption is expected to grow at a CAGR of 2.1% during 2025 to 2035, slightly lower than the world average due to a maturing automobile sector and increasing EV penetration. However, demand for synthetic and semi-synthetic oils in passenger vehicles and heavy commercial vehicles (HCVs) is considerable.
Tight EPA emission standards are pushing automakers and lubricant manufacturers to low-viscosity, fuel-efficient engine oils such as 0W-20 and 5W-30. The growing number of hybrid car sales is also driving demand for lubricants specific to hybrids, particularly in urban areas, where government incentives for green vehicles are accelerating the transition.
Heavy-duty diesel fuels dominate the freight and logistics industry, where fleet managers lean toward extended-drain synthetic lubricants to decrease downtime. Further government mandates, such as those from the California Air Resources Board (CARB) and federal fuel economy regulations, will likely accelerate the trend toward high-performance, low-emission engine oils.
Demand for eco-friendly lubricants is expected to rise, and thus the UK automotive lubricant industry is slated to grow at a CAGR of 2.3% from 2025 to 2035. Replacement spurs driven by the growth of electric and hybrid vehicles are conducive factors for industry growth. It is expected that the UK government's plan to end the sale of new petrol and diesel vehicles in 2035 would drive the industry toward specialist EV lubricants, including thermal management fluids and e-gear oils.
At present, low-viscosity technology, which improves compliance with fuel efficiency regulations, dominates the industry for synthetic engine oils, particularly in passenger cars and LCVs. ACEA-approved lubricants must meet challenges set by European emission and performance specifications. The HCV phase is also slowly transitioning to low-sulphur and bio-based lubricants-most notably against urban low-emission zones (LEZs).
The automobile oil industry in the country is expected to expand at a CAGR of 2.4% from 2025 to 2035, higher than the global average due to stringent environmental regulations and increased hybrid vehicle sales. In France, the 2050 carbon neutrality drive by the French government has started influencing lubricant formulations towards bio-based and synthetic oils.
The passenger car sector continues to be the biggest consumer of automotive oils, with fully synthetic automotive oils dominating this field owing to their fuel efficiency and extended oil change intervals. The high-rate consumption of 0W-20 and 5W-30 lubricants has increased remarkably, mainly to adapt to Euro 6 and future Euro 7 regulations.
The government is encouraging the LCV and HCV industries to switch to low-emission diesel engine oils through subsidies and incentives for cleaner fleets. Growing application in commercial vehicles, on account of tax incentives, is propelling the demand for bio-lubricants.
Germany, being the hub for automotive innovation, is expected to grow at a 2.6% CAGR between 2025 and 2035, in line with the global average. The growing inclination in the region towards high-performance, fuel-economical, and eco-friendly lubricants is reshaping the industry dynamics.
The passenger cars are the leading segment, with increasing supplies of synthetic and hybrid-compatible oils. Germany's premium automobile sector, with its numerous BMW, Mercedes-Benz, Audi, and other brands, requires high-performance engine lubricants in the 0W and 5W viscosity range. Furthermore, the HCV and industrial vehicles segment is a key driver of the demand for high-performance, long-life diesel engine oils.
Germany is driving the development of bio-based and hybrid oils to reduce CO2 emissions from commercial traffic. This effort aligns with the country’s broader sustainability goals, promoting alternatives to conventional petroleum-based oils to improve environmental performance in the transport sector.
The luxury and performance car industry in Italy creates a demand for performance synthetic lubricants, sourced from high-revenue manufacturers like Ferrari and Lamborghini. The transition to Euro 7 emission regulations is prompting OEMs to embrace low-viscosity, fuel-efficient lubricants. Rising demand for hybrid and electric vehicles (EVs) is slowing demand for conventional engine oils but is increasing e-transmission fluids and battery cooling systems.
Italy's afterindustry is strong, and demand for OEM-recommended lubricants is growing. In accordance with the vision of the EU having carbon neutrality, the country also backs bio-based lubricants. The Automotive Oil industry in Italy is expected to grow at a 2.0% CAGR between 2025 and 2035.
South Korea, the home of Hyundai, Kia, and Genesis, is a dominant force in the global automotive industry. As the use of hydrogen, electricity, and electrification in transportation grows, so does the need for thermal management fluids (TMFs). This is causing changes in the requirements for lubrication. High-efficiency lubricants and hybrid engine R&D in South Korea are driving the industry.
An increasing demand for high-end synthetic oils cannot be denied due to the rising demand for Korean-manufactured vehicles, which necessitates more commercial vehicles and heavy-duty lubricants. The government will also encourage the use of eco-friendly lubricant, enabling an eco-sustainable industry. The Automotive Oil industry in South Korea is expected to grow at a 2.5% CAGR between 2025 and 2035.
Japan's automotive sector is renowned for its technological efficiency and innovation, with Toyota, Honda, and Nissan being longstanding leaders in this field. The leading nation for hybrid cars keeps demand for low-friction automotive oils high, and growing EV volumes are turning lubricant requirements into e-transmission fluids.
Japan is also aggressively bringing down high-emission lubricants with strict fuel economy specifications that are forcing the use of synthetic and bio-based oils. However, the continued success of the afterindustry is contingent upon Japan's older vehicle population and the ongoing demand for OEM-approved lubricants. The Automotive Oil industry in Japan is expected to grow at a 2.3% CAGR between 2025 and 2035.
China, the largest single-country car industry in the world, witnessed growth in both the passenger andcial vehicle segments. It is one of the key countries in East Asia and is likely to account for more than 70% of the share in Asia-Pacific region. Simultaneously, the government's promotion of new energy vehicles (NEVs), such as electric vehicles (EVs), hybrids, and hydrogen cars, is causing a significant disruption in the lubricants industry.
While conventional engine oils remain in high demand, the shift to synthetic, fuel-saving,, and EV-compatible lubes is gathering momentum. China's industrial growth also drives the demand for heavy-duty lubricants used in logistics and construction equipment.
While domestic lubricant brands are expanding, international brands are gaining a significant industry share through OEM partnerships and localized production. The Automotive Oil industry in China is expected to grow at a 3.2% CAGR between 2025 and 2035.
The Indian automotive oil industry is one of the fastest-growing in the world, fuelled by increasing vehicle ownership, a blossoming infrastructure space, and a booming logistics ecosystem. With the implementation of BS-VI emission standards, there is a greater need for synthetic and semi-synthetic lubricants. These standards call for low-viscosity, high-performance oils.
The commercial vehicle sector is a significant driving force behind this, as fleet operators increasingly select long-drain interval lubricants to minimize maintenance expenses. While the EV adoption in India has still not attained momentum, the lubricant segment is preparing for offerings related to e-mobility.
Local manufacture and collaboration with the OEMs is critical as a drive and government initiatives towards lubricant manufacture that are environmentally friendly in nature. The Automotive Oil industry in India is expected to grow at a 3.5% CAGR between 2025 and 2035.
| 2020 to 2024 | 2025 to 2035 |
|---|---|
| The industry has witnessed a slow recovery post-pandemic, with rising and falling demand impacted by supply chain disruptions and economic fluctuations. | Steady growth driven by technology advances, regulatory regimes, and increasing fuel-efficient lubricants demand. |
| There is a strong demand for synthetic oils, especially in maturing regions, owing to better engine performance and longer drain intervals. | Synthetic oils will remain the most popular lubricant by share and become the most popular by tonnage, as penetration rises in emerging industries and the trend towards low-viscosity grades continues. |
| Hybrid and CNG vehicles gained a share with the increasing use of alternative fuel vehicle lubricants. | There is a growing demand for EV-compatible lubricants, e-transmission fluids, and hybrid engine oils. |
| Increasing regulations compelled a shift to lubrication for low-sulphur, low-viscosity, and high-performance lubrication. | Growing worldwide emissions regulations are driving the utilization of bio-based, completely synthetic, and high-efficiency lubricants. |
| Disruptions to the raw material supply chain and volatile crude oil prices affected the profitability and pricing of lubricants. | The robustness of the supply chain builds; investments support sustainable raw material sources, stabilizing the industry. |
| Consumer demand for high-performance lubricants has been shaped by OEM specifications and technology trends. | The Automotive Oil Industry have major collaborations with OEMs to drive lubricant innovation-explorations and implementations around AI-based predictive maintenance and intelligent lubrication solutions. |
Major players operating in the automotive oil segment strives to promote themselves through price, innovation, alliances and geographical expansion. While price competition remains fierce, premium brand choices indicate differentiation by high-performance synthetic and green lubricants.
These investments spread through the work on developing low-viscosity, fuel-efficient and electric vehicles compatible lubricants that comply with emissions standards. Strategically partnered with OEM partnerships help fortify product offerings, whereas M&As land us a foothold in the industry.
Major players are expanding into emerging economies like India and China, prioritizing localized production and efficient delivery. This evolving landscape gives way to digitalization, such as AI-based predictive maintenance solutions, as a prominent differentiator.
The global automotive oil industry is highly fragment, with some key players bearing a largish share of the industry. With the most extensive distribution network and strong OEM partnerships, Shell leads with an estimated 13-15% market share.
ExxonMobil holds approximately 12% market share and is well-positioned due to its advanced lubrication technologies and OEM partnerships. The State-owned oil and gas companies, BP's Castrol which has an industry share of 10-12%, and other competitors in the respective segment strengthen each other's market position with novel and cutting-edge portfolio of products and a major segment of growth from developing economies.
Chevron owns nearly 9% and TotalEnergies about 8% of it. Sustainability and high-performance lubricants have been the two areas where the two companies have developed products to remain competitive in the marketplace.
Valvoline (~7% industry share) remains the leader in the after industry, primarily focusing on DIY customers and quick-lube shops. It retained its position because of its brand loyalty and customer service approach.
FUCHS Petrolub SE, one of the largest independent lubricant manufacturers, commands a notable share in the industry. The German-based company specializes in customized lubrication solutions for passenger cars, heavy-duty vehicles, and industrial applications. Its focus on research and innovation has driven the adoption of high-performance, fuel-efficient oils tailored to meet stringent European emission standards.
PETRONAS Lubricants International, a subsidiary of the Malaysian energy giant PETRONAS, has also expanded its global presence. With strong OEM partnerships, the company has positioned itself as a leader in premium synthetic lubricants. Its commitment to motorsports, particularly through its collaboration with Mercedes-AMG Petronas Formula One Team, has helped solidify its brand image and technological advancements in high-performance engine oils.
The industry is experiencing growth in vehicle production, rising demand for high-performance lubricant, stringent emission regulations, and growing penetration of bio and synthetic oils.
The rise of EVs reduces demand for traditional engine oils but drives growth in e-transmission fluids, thermal management lubricants, and hybrid oils.
Asia-Pacific, including China and India, is experiencing a rapid expansion of vehicle fleets, while the rest of North America and Europe is focusing on premium and environmentally friendly oils.
Demand for bio-based, low-viscosity lubricants is split into lower viscosity products. This is because of stricter rules on fuel efficiency and emissions, like the ones that apply to lighter oils (0W and 5W) in some regional industries.
To meet these evolving industry needs, companies invest in artificial oils, long-drain lubricants, predictive maintenance based on artificial intelligence, and eco-friendly formulations.
The industry is segmented into mineral, synthetic and semi-synthetic
It is fragmented into diesel, petrol and alternative fuel
The sector is segmented into passenger vehicle, heavy commercial vehicle, light commercial vehicle and two wheelers
It is fragmented into North America, Latin America, Europe, East Asia, South Asia & Pacific and Middle East & Africa.
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