Who can outperform the 22 billion lube market?

The temperature of the unified lubricant casing is still rising, and ExxonMobil, a brand with over a century of reputation, has been preparing to make a strong comeback in the Chinese market. Yesterday, Lin Guosheng, Deputy General Manager of Lubricants and Special Oils at ExxonMobil (China) Investment Co., Ltd., revealed to reporters that the company plans to open an additional 100 vehicle maintenance centers across China by the end of this year. This expansion will bring Mobil 1 lubricants to more consumers, with a total of 200 specialized stores already in operation nationwide. Building a strong vehicle maintenance network is a core part of ExxonMobil’s strategy in China. In response to Shell's recent moves, Lin explained that the fast-growing Chinese lubricants market has attracted numerous international players. “We are also making significant investments, but what sets us apart is our established sales channels,” he said. “Our main focus is on car care networks, as many Chinese consumers are increasingly concerned about engine performance. We aim to expand our presence by leveraging existing market conditions and building more car care stores.” The new Baijiao Conservation Stores operate through a cooperative model, where ExxonMobil, distributors, and store owners work together. These stores are strategically located in major cities such as Beijing, Shanghai, Guangzhou, Shenzhen, and Chengdu—areas experiencing rapid growth in private car ownership. Although ExxonMobil had a three-year plan for its lubricant stores, Lin declined to share specific details, citing confidentiality reasons. However, it’s clear that the company is committed to strengthening its foothold in the Chinese market. The Chinese lubricant market is growing rapidly, with annual consumption reaching nearly 4 million tons. The market size is estimated at around 22 billion yuan, and foreign brands dominate the high-end segment, capturing over 80% of the market. Domestic brands mainly compete in the mid-to-low range, fighting for the remaining 20% of profits. According to data from 2003, China consumed 4 million tons of lubricants and generated over 30 billion yuan in revenue, surpassing Russia to become the world’s second-largest consumer after the U.S. Over the next five years, the market is expected to grow by 10% annually. In addition to expanding their retail presence, foreign oil giants are also targeting vehicle manufacturers. For instance, Castrol, a subsidiary of BP, recently partnered with Dongfeng Group, China’s largest commercial vehicle manufacturer, to establish Dongfeng Castrol Oil Products Co., Ltd. From installation to after-sales service, Dongfeng Motor will use Castrol oil across all its vehicles. By 2010, the joint venture aims to reach 30,000 tons in annual sales, capturing 10% of the market. Another major player, a U.S.-based oil supplier, recently announced the opening of its third 200,000-ton production line in China. Industry insiders note that while domestic brands have made progress, it will take time for them to gain a significant share of the high-end market. With continued investment and strategic expansion, global players like ExxonMobil are well-positioned to maintain their dominance in the evolving Chinese lubricants landscape.

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