Opportunities and Challenges for Domestic Lubricant Brands During the Pandemic

Before the WHO declared the Covid-19 outbreak a global pandemic, from the end of 2019 to now, the global economy has truly been struggling and falling into crisis. Numerous sectors and industries experienced rapid declines, with some teetering on the brink of bankruptcy. Specifically, for the domestic lubricant market in Vietnam, this "sensitive" time will undoubtedly present countless challenges; however, if perceived correctly, lubricant companies could find opportunities for their businesses.

The pandemic is having a direct impact on the global economy.

1. Overview of the domestic lubricant market before the pandemic hit

Vietnam has always been a fertile ground for engine oil brands before the corona outbreak, as we possess the fourth-largest motorcycle and motorbike market in the world, with over 45 million vehicles in circulation. Experts estimate that each motorcycle in Vietnam consumes about 3 to 4 liters of lubricant annually, passenger cars consume 12 to 18 liters/year, and trucks consume 120 to 160 liters/year. The latest report from Castrol also indicates that the scale of the lubricant market in Vietnam is estimated at around 264 million liters, with motorcycles accounting for 34%, cars 6%, trucks 43%, and industrial oil 17%.

Mr. Nguyen Tuan Quynh, CEO of Saigon Fuel Corporation (SFC), stated: “With a lubricant market scale of around over 1 billion USD, foreign companies hold an estimated market share of 70-80%. The top 5 companies (BP/Castrol, PLC (Petrolimex), Shell, Chevron, Total) account for up to 60% of the market share. Not every brand can maintain its position if it does not adapt its strategy flexibly. As consumer awareness increases, the market landscape could change.”

Specifically, with a 26% market share, various domestic brands have also shown strong growth in recent years, notably Grand Oil and Max Plus, competing fiercely with foreign lubricant brands. Being a “golden” territory in the Southeast Asian lubricant market, Vietnam has maintained stable growth in recent years before being affected by the COVID-19 pandemic.

Lubricant brands always ensure a rich and diverse supply.

2. How can domestic lubricant companies turn RISK into OPPORTUNITY amid the pandemic?

Faced with the common RISK of the global economy, business owners constantly struggle to find ways to cope with the pandemic, which will certainly leave heavy consequences afterward. Domestic lubricant companies will face numerous challenges, having previously competed fiercely with renowned global brands; they must now strengthen their efforts to