The lubricants industry is poised for substantial growth, driven by a dynamic automotive market and evolving industrial demands. Mr. Sundar Subramanian, Senior Vice President at APAR Industries Limited, presented compelling insights during the APAR Investor Day 2024, highlighting the company’s strategic positioning and future opportunities within this sector.

Overview of the Automotive Market

India ranks among the top three automobile markets globally, with a notable distinction as the largest two-wheeler market. The country boasts an impressive production capacity of approximately 1.5 million two-wheelers monthly, translating to nearly 18 million annually. Additionally, India is recognized as the second-largest manufacturer of construction equipment and holds significant positions in three-wheeler and passenger car markets.

The passenger car segment is particularly noteworthy, with India producing around 4.8 million cars annually, trailing only behind China and the United States. This landscape presents considerable growth potential as the economy continues to develop.

Electrification Trends and Market Dynamics

The transition towards electric vehicles (EVs) is reshaping the automotive landscape. Currently, electric two-wheeler registrations average around 75,000 units monthly. Despite this growth, traditional Internal Combustion Engine (ICE) vehicles continue to dominate due to cost disparities and limited infrastructure. Governmental support through subsidies will be pivotal in accelerating EV adoption.

In contrast, three-wheelers are experiencing a notable shift towards electrification, particularly in last-mile logistics. The penetration of electric three-wheelers has reached approximately 40%, indicating a promising trend for commercial cargo applications.

Market Size and Growth Projections

The lubricant market in India is estimated at approximately 3 million metric tons, with a turnover nearing INR 38,000 crores. The industry’s growth trajectory is projected at around 3% CAGR overall, with automotive lubricants expected to grow at 2.5% CAGR and industrial lubricants at a more robust 4% CAGR due to rapid industrialization and shifting supply chains.

APAR is strategically positioned within this market. As one of the top players, it ranks ninth in lubricant volumes and holds strong positions in agricultural and industrial segments. The company is also expanding its export footprint into regions like the Middle East and Africa.

Strategic Focus Areas

APAR emphasizes several key areas to drive growth.

Product Innovation: The company has developed high-performance lubricants that align with environmental sustainability goals, including fuel-saving products and those designed for durability.

Digitization: A robust distribution network has been established through digitization efforts that enhance communication with retailers and mechanics, improving marketing efficiency and return on investment.

Collaborative Partnerships: Strong relationships with Original Equipment Manufacturers (OEMs) enhance product management capabilities and logistics solutions, fostering long-term business engagements.

Market Adaptation: The focus on specialized metalworking fluids reflects a proactive approach to evolving manufacturing needs as industries transition from traditional materials to advanced alloys associated with electric vehicle production.

APAR stands at a pivotal moment in the lubricants sector, characterized by significant growth opportunities fuelled by an expanding automotive market and increasing industrial demands. By leveraging innovative products, digital transformation, and strategic partnerships, APAR aims to solidify its leadership position while contributing positively to environmental sustainability initiatives.

As the company navigates these developments, it remains committed to enhancing its offerings and expanding its market presence—ensuring that it meets current demands and anticipates future trends within this dynamic industry landscape.