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Automotive Gear Oil Market Analysis and Review by Source Type (Mineral Based and Synthetic Based)
Global automotive gear oil sales were valued at around US$ 13,922.8 Million at the end of 2022. The market is projected to register 4.2% CAGR and top a valuation of US$ 21,954.7 Million by the year 2033.
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Automotive Gear Oil Market Value (2022A) |
US$ 13,922.8 Million |
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Automotive Gear Oil Market Estimation (2023E) |
US$ 14,489.6 Million |
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Automotive Gear Oil Market Forecast (2033F) |
US$ 21,954.7 Million |
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Value CAGR (2023 to 2033) |
4.2% |
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Collective Value Share: Top 3 Countries (2022A) |
49.9% |
Automotive gear systems, such as differentials and manual transmissions have the propensity to engage in metal-to-metal contact, which generates friction and heat. If not maintained properly, this friction and heat lead to potential component failure. To lower the friction and transfer heat away from them, the right gear oil is needed that helps in protecting these moving parts.
Automotive gear oil demand is estimated to account for around 45% of the global gear oil market. Rise in the sales of vehicles after 2020, increase in per capita disposable income are key growth influencing factors for the market.
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Gear oil has a higher viscosity than engine oil, thus finds application in automotive industry. The market has witnessed a growth rate of about 3.8% between 2018 and 2022. The market witnessed a downfall during the Covid-19 outbreak, which has resulted in a dip in the historical growth rate. Industry marked a decline of more than 5% in world auto production and ended 10 years of continuous growth cited by OICA. Increase in the sales of vehicles after 2020, is expected to enhance the demand resulting in a higher growth outlook of the market to 4.2% in between 2023 and 2033.
As the industry bounced back from the bleak situation, significant investments for massive market expansion are being witnessed. Spending on vehicle maintenance is rising as consumers become more quality- and efficiency-conscious. The industry will benefit from a higher percentage of vehicle ownership among younger age groups that choose preventive maintenance over repairs. Increasing penetration of automatic transmission (AT) in passenger cars and growing sales of automatic transmission vehicles all over the world are anticipated to create more demand for automatic transmission fluid.
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Get a Customized VersionGrowth in the automotive industry combined with technological developments and the demand for high-performance, fuel-efficient vehicles, is expected to create a substantial growth opportunity during the projected timeframe. Automotive sales in developing countries are growing rapidly, which is mostly due to a positive economic outlook and rising disposable income. Furthermore, the need for high-performance heavy vehicles is being driven by growing industries including the mining and construction sectors.
Developing countries are expected to offer high growth opportunities, driven by growing the middle-class, and favourable demographics. Increasing disposable income of the middle-class population is estimated to boost investments in leisure activities, which, in turn, is expected to generate new horizons for the growth of the automotive gear oil market in these regions.
Technical advancements, a developing and growing manufacturing sector, and optimal demographics with most of the population being under 30 years are a few of the factors fuelling the growth of the high-performance vehicle segment in developing countries like India, thereby generating significant opportunities for automotive gear oil.
What is the Growth Outlook of the Automotive Gear Oil Market in the United States?
The United States has one of the largest automotive markets in the world both in terms of production and sales. The automotive industry is leading toward innovation and research and development in the past several years in the country. These initiatives are transforming the automotive industry to grab ample opportunities of the 21st century. According to the International Trade Administration and the U.S. Department of Commerce, the United States is the world’s second-largest market for vehicle sales and production.
Growing population, especially Gen-Z and Millennials generations are the active end users of vehicles. Increasing sales of vehicles and the need for proper maintenance are resulting in the growing demand for automotive gear oil. This in turn is expected to boost the growth of the market and project lucrative opportunities for gear oil manufacturers.
With a large consumer market owing to presence of largest number of millionaire in the world and high per capita income, open investment policies, skilled workforce, available infrastructure, and a favourable production environment, the United States is anticipated to remain one of the leading markets for the 21st century automotive industry.
Why Does Germany Account for a significant share of the Automotive Gear Oil market?
The automotive industry is considered to be the backbone of the German Economy and the German automotive industry is predominant in the global market. When it comes to autonomous driving technologies and high-tech automotive products, Germany is significantly moving ahead in this competition all over the globe. Germany enjoys its number one position in Europe, as the region’s biggest automotive market, both in terms of production and sales, accounting for around 25% of all passenger cars manufactured with 20% of all new registrations as per ACEA.
Germany registered passenger car registrations for 2.6 million units and passenger car production was about 3.1 million units for the year 2021 as per ACEA. Germany has a strong market for luxury and premium cars, demand for premium and passenger cars is owing to the increasing per capita income, lifestyle, and the population is expected to boost the automotive industry, which will result in the increasing demand for gear oils for maintenance.
The growing premium cars market, innovative production locations, skilled labour force, international research partners, higher FDI, and others are the key factors that are strengthening the German automotive industry. During the forecast period, the automotive gear oil industry is anticipated to be favoured by the growth of the automotive industry.
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How The Increasing Sales Of Passenger Cars Will Favour The Growth Of The Market?
The most popular means of transportation in developed countries is the passenger car, and as per capita income rises, so do passenger vehicle numbers in developing countries. Due to characteristics like their small size, attractive designs, and affordability, passenger vehicles have become extremely popular with consumers over time.
The increase in the middle-income group population and the improvement in the standard of living in emerging countries are the primary drivers driving the market's expansion. Consumers are additionally drawn to these automobiles due to the availability of economical solutions.
The passenger car segment is the largest consumer of automotive gear oil. To ensure the smooth running of the passenger car components throughout their entire service life, high-performance gear oils are required. These oils protect components from wear and friction and help in smooth functioning.
Car owners are understanding the importance of preventive auto maintenance. Preventive car maintenance includes services including periodic fluid and filter changes, brake parts replacement, mechanical tune-ups, etc. Transmission oil or gear oil is mostly replaced with every change of transmission filter. An increase in per capita spending on automotive repair and maintenance services is projected to support the target market growth.
How The Synthetic Based Automotive Gear Oil Segment Is Expected To Perform During The Projected Period?
A vehicle's gear oil is a crucial component since it acts as a first line of defense to keep the gearbox running smoothly. Gear oils are used to improve the performance of the transmission system as well as to reduce wear and tear and improve fuel efficiency. It has been observed that a shift in the demand towards high-premium, thinner synthetic oils in the automotive segment has taken place with the incorporation of new technologies. Demand for synthetic and semi-synthetic lubricants growing at a rapid pace compared to mineral oils. With increasing awareness and knowledge among consumers, the demand for synthetic-based gear oil is anticipated to further grow in the coming years.
Synthetic gear oils are usually multi grade oils with strong additive chemistries in their formulation. These gear oils are suitable for usage in both very high and very low temperatures. They shield the gears from rust, wear, and foaming of the gear oil inside the gearbox. Gearboxes that operate in harsh settings, such as sub-zero temperatures, intense heat, damp climates, and dusty or unclean conditions, employ synthetic oils.
Individual vehicle owners or fleet owners aim to install improved high-performance lubricants in their vehicles, which demand high-quality fluids. This, in turn, is one of the primary growth drivers for the market in the coming years.
The market is fairly fragmented market with the presence of several key players along with few dominant market participants. Owing to fragmentation of the market, it offers a competitive environment and high bargaining power to customers. Manufacturers are keen on developing products, which are model specific. Automotive OEMs are providing model-specific gear oils with different kinds of synthetic elements according to the end-user requirement, whereas high-performance gear oils for racing cars are being offered.
Most of the prominent brands are engaged in collaborating with service providers or local mechanics to expand their business. By providing training and undertaking dealer development programs these manufacturers are reaching a larger consumer section.
Key manufacturers are providing synthetic gear oils of high quality such as automatic transmission fluids to increase the efficiency of automatic transmissions. This is intended to be an important contribution toward reducing CO2 emissions.
For Instance:
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Attribute |
Details |
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Forecast Period |
2023 to 2033 |
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Historical Data Available for |
2018 to 2022 |
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Market Analysis |
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Key Regions Covered |
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Key Countries Covered |
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Key Market Segments Covered |
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Key Companies Profiled |
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Pricing |
Available upon Request |
By Source Type:
By Vehicle Type:
By Transmission Type:
By Distribution Channel:
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The global market for automotive gear oil is estimated to be valued at over US$ 13,922.8 Million as of 2022.
The market of automotive gear oil is estimated to reach a valuation of US$ 14,489.6 Million by 2033.
The market of automotive gear oil is projected to witness a value CAGR of 4.2% from 2023 to 2033.
The passenger cars segment is estimated to be a key end-use industry, and the segment is estimated to hold about 64% of the total market share.
