With the continuous decline in international crude oil prices, around the hot discussion of “lubricant price cuts”, Shell, Mobil, etc., and CNPC “Kunlun” and Sinopec’s “Great Wall” broke out a market scramble, which has increasingly highlighted the brand effect.

This year's lubricants market can be described as twists and turns, due to the constant increase of base oil, additives, packaging materials, etc., Shell, ExxonMobil, PetroChina "Kunlun", Sinopec "Great Wall" and other companies have raised the price of lubricants. With the continuous decline in international crude oil prices, around the hot debate about when “lubricants will cut prices”, Shell, Mobil and other Chinese and foreign companies compete with Sinopec “Kunlun” and Sinopec’s “Great Wall” market, which has increasingly highlighted the brand effect.

Kunlun Great Wall Leads High-end Brands

Lubricants are the most brand-name products in petroleum products. Foreign brands in the high-end field of lube oil in China for more than a decade, resulting in "the entire Chinese market only occupies 20% of the share, but sitting on 80% of profits," the "28 myth." However, with the maturity of China's local lubricants companies such as Kunlun and Great Wall, and their efforts in the high-end market, the "28 law" of the lubricants market has been broken, and the share of national brands in the high-end lubricants market has climbed to 40%.

“Kunlun Lubricants has attached great importance to public welfare activities and has continued to exclusively sponsor China’s Top Ten Drivers who are justifiably good and have successfully passed the internationally recognized ISO/TSI 6949:2002 automotive industry certification.” The person in charge of the Kunlun Lubricants Office told reporters. At the same time, from the China Autocross Championship to the ASEAN Rally, from the sponsorship of the National Truck Race to becoming the official partner of the Houston Rockets, the Chinese basketball star Yao Ming. Brand marketing methods such as sports marketing have become an indispensable part of Kunlun Lubricant brand building.

China's lubricant industry has a reference to the meaning of the words: "OEM (designated production) who have the world." With the diversification of lubricating oil terminal channels, automobile auxiliary oil is more monopolized through bidding and cooperation, and domestic brands such as Great Wall Lubricants have begun to transform from product manufacturers to manufacturing service providers, laying large-scale car maintenance centers on Consumers provide one-stop services such as car washing, maintenance and oil changes.

The reporter learned that Great Wall Lubricant is China's largest OEM partner currently, and is partnering with about 200 auto parts and automakers, and has passed GM, Toyota, Volkswagen, DaimlerChrysler, Honda, etc. Automotive giant technical certification. The relevant person in charge of Sinopec Great Wall Lubricants said that Great Wall Lubricants compete in the OEM market, the most important weapon is the excellent quality assurance and research and development capabilities.

Shell unified "dual brand" market

"Unified Lubricant as a member of Shell, it is necessary to gain Shell's successful experience in a wider area and deeper level, especially in the aspect of corporate management process and work efficiency, etc. It will be very helpful to us." General Lubrication General Manager Li Jia said. It is reported that after Shell's unification and completion of mergers and acquisitions, according to the prior agreement, it will deploy a uniform adjustment of product structure, from the low-end market to the high-end market, and increase the investment in brand construction in Shaanxi, Gansu, Chongqing and Chengdu. “Shell also introduced the low-end product 'White Heineken', which is now called 'HX2' and priced at RMB 62.” The staff responsible for the Shell Lubricants business told reporters.

Facts have proved that with the gradual maturity of China's lubricants market, Shell and other multinational companies in China's expansion strategy has also developed in-depth. The use of the "Double Brand" strategy, on the one hand, has enabled the joint competitiveness of the two major brands positioned in different markets to increase rapidly, which has greatly strengthened the competitiveness of both parties in the Chinese market; on the other hand, it has enriched the Shell Lubricant product line and made Shell become China. The international energy company ranked first in the lubricants market ranks third in the lubricants market.

The reporter learned from the Shell Lubricant Brand Promotion Department that on September 3 this year, Shell Lubricants launched a large-scale branding and product reshaping operation in Beijing: Uniform adoption of the “Only to challenge the challenges” as a brand new interpretation of its brand spirit. The three major brands of automotive lubricants were "Hi-Benefit" for gasoline engine oil, "Baima" for diesel engine oil and "Ed Prince" for motorcycle oil. At the same time, a comprehensive adjustment of the product line, the use of new packaging, together with brand-new brand promotion.

“We will use a powerful technology platform and excellent talents to help Chinese car owners, car manufacturers and channel customers to meet the harsh challenges from all aspects with high quality products and excellent service.” Director of Shell Lubricants Business in Mainland China and Hong Kong Shen Jian, general manager, said. For the full update of the logo's sales, Ms. Bai Lingling of Brand Promotion Department told reporters: “This is a trade secret and it is not convenient to disclose it.”

Energy Saving and Environmental Protection Promotes Lubricating Oil Competition

On July 1st this year, China has fully implemented the State III minimum emission standards, and some provinces and cities have implemented the National IV standard, which involves light and heavy gasoline and diesel locomotives. All parts and vehicle companies have increased the efficiency of mechanical work in order to meet standards. At the same time, it also puts forward higher requirements for the level of lubricants. If you want to have more excellent high-temperature viscosity retention capacity, prevent evaporation capacity, effective acid corrosion protection ability and reduce the ability of engine wear, so as to provide more effective and more reliable protection for the engine.

In response, many companies have introduced the latest "environmental protection" and "energy-saving" products. Many new products developed by lubricant manufacturers are also focused on environmental protection and energy conservation. Shen Jian said that in terms of the lubricating oil brand and product remodeling operations, sustained growth has made the Chinese market the second largest market for Shell's global business, but new challenges have followed. Challenges from environmental regulations, effective use of energy, engine technology innovation and market competition all require that Shell Lubricants must use forward-looking strategies to seize opportunities.

According to a report released by internationally renowned consulting firm Klein, the global lubricant market has matured, but the opportunities are still in China and India. By 2020, China's lubricant consumption will exceed the United States, becoming the world's largest lubricant market. At the same time, as consumers become more rational and their brand consumption behavior increases, it can be expected that in the face of such a good market prospect, the market share competition between domestic and foreign lubricant manufacturers will intensify, and those with no scale of production will have no R&D. With technological advantages, lubricant companies pursuing a "low-cost sales price war" will have no place.

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