Re: Indian Lube Industry - Modern Engines Reducing Oil Consumption Quote:
Originally Posted by SS-Traveller Is there a breakup available for the types of lube oil (mineral, synth, classification according to brands) that Castrol sells in the Indian market? |
No info on this. Quote:
Also, any data regarding how many OE manufacturers take Castrol as their OE oil, and what is the volume offtake now vis-a-vis say, 2005-6?
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The management mentions that - in the past, majority of the sales was from traditional outlets like independent garages, petrol bunks and small retail outlets. But now, there is definite shift towards direct sales to manufacturer and to its dealerships - and apparently, this trend is going to continue in the future. Quote:
Given that Castrol is being forced out from OE supplies (which comprises a very large chunk of any oil co.'s sales - Shell / Indianoil / Idemitsu have made major inroads into this market AFAIK), the figures of 20% put up by Castrol may be related to the replacement oils / lubes market.
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Current marketshare scenario -
Castrol India - 20%
HPCL/BPCL/Indian Oil - 30%
Shell/Total/Gulf Oil/Tidewater Oil/Other MNCs- 25%
Small time local brands - 25%
I guess over a period of time, the small time local players will be jettisoned off the market. Quote:
Originally Posted by phamilyman b. Look at sales price per liter. Gawd. What am I paying 220-300Rs/liter for my engine oils when Castrol only reports 164 rs. That means that distributors/retailers are making 26% margin. Not a bad business to be in! |
7 - 8% each for the distributor and retailer is more likely
Remember that Rs. 164/litre is Castrol's AVERAGE realization. 2 wheeler/3 wheeler engine oil costs would probably be a lot lower than car engine oil's rates. Quote:
c. Disagree. Maruti has always used mineral oils. From 5k to 10k, they are still with mineral oils. So is Hyundai. Prima facie, with >60% share of the market (passenger cars) you would assume that the market is still dominated by mineral oils. I would not say its moving "slowly but surely towards syn/semi-syn" though those segments are definitely growing.
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OK, makes sense.
Castrol's products are based on crude oil - so the reason for the increase in average rates could just be because of higher crude oil prices. The second graph shows the increasing raw material prices.
Companies like castrol are not only able to pass on the costs to the end user - but looks like they are increasing their margins (through aggressive advertising, introduction of new brands/products that reduces wear and tear by X% and increases engine life by Y% and so on) |