Global Lubricant Market Initially Positive Despite Stalling Car Sales

Despite the global lubricants market's six percent rebound in 2010 and a promising start to 2011, the industry's growth has generally abated according to Parsippany NJ-based international consulting and research firm Kline & Company.

Asia, until now the major engine for growth, has seen its new car sales contract, with China's estimate for 2011 at three percent compared to thirty percent last year. India is estimated to see just two percent growth compared to the double-digit magnitude enjoyed last year. Geeta Agashe, Vice President of Kline's Petroleum and Energy oversight, attributes this slowdown to regional inflation, interest rate hikes by central banks, the supply-chain disruption wrought by the tsunami/earthquake afflicting Japan, and exports contracted by lower demand. However, Agashe also observes that 2010's benchmark increases were spurred by easier access to credit for car-buyers, and government incentives such as vehicle scrappage ("cash for clunkers") schemes.

Conversely, 2011 Q1-Q3 car sales in the United States are up ten percent over the same period last year and steel production remains resilient in the face of near universal declines: Asia is declining 0.7 percent per month (mainly due to China; India continues to grow), the EU 27 is declining at 7.7 percent per month while Germany, France, and Italy are declining at four percent, eleven percent, and nineteen percent per month, respectively.

Europe's 2011 Q1-Q3 car sales show much disparity with Germany's healthy eleven percent growth checked by a five percent drop in sales in the United Kingdom, an eleven percent drop in Italy, and a twenty-one percent drop in Spain. However, Germany's exceptional performance is already waning as the eurozone makes more demands of it and the weakness of its neighboring markets curbs its exports. As an encouraging counterpoint, Europe's commercial vehicle sales are up twelve percent over 2010.

Fueled by large domestic economies, Russia and Brazil are maintaining growth with car sales in Brazil alone up 7.5 percent over last year.

With no solution yet found for the paralyzing eurozone financial crisis, exacerbating an already precarious and wary global economy, Kline's research indicates modest—if any—growth in car sales in the near-future, which will challenge the lubricant industry's recovery from the lows of 2008-2009.

According to Agashe, the research extrapolates a flat global lubricants market in 2011, and with these particularly uncertain times, a volatile 2012.

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