Indonesian Automotive Lubricants Aftermarket – Industry Players Getting Slicker?

Published: 1 Aug 2005

Introduction

As the consumer glance frantically across the shelves for the perfect vehicle lubricant, he or she quickly becomes overwhelmed by the plethora of lubricant choices. Some are quick to pick out brands they see and hear on TV and radio, or to brands they’re familiar with from highway billboards. Others who are uncertain about their choice turn to the vendors for suggestions and recommendations. Customers in Indonesia today have a wider range of choices of lubricants to choose from as compared to ten years ago.

Foreign brands are making inroads and are gaining popularity as consumers perceive imported brands to be superior to homegrown ones. This changing consumer trends in Indonesia are the result of market liberalization as Indonesia opens up its once protected lubricant market to the outside world. As a result, foreign brands are coming in droves much to the chagrin of the market leader – national brand Pertamina.

Indonesia deregulated the lubricant industry in 2001, relinquishing the monopoly of state-owned oil company Pertamina on in-country blending thus allowing foreign players to participate in the booming lubricant business in Indonesia. This has put an end to Pertamina’s virtual monopoly in the market - paving the way for a level playing field championed by global players.

The lubricants aftermarket

Indonesia had a market volume of about 310 million liters of automotive lubricants in 2004 with 4 wheeled vehicles accounting for about 110 million liters and 2 wheeled vehicles (motorcycles) amounting to about 200 million liters. Motorcycles or 2 wheelers have a larger population (estimated 21 million units compared to 7.5 million units for 4 wheeled vehicles) hence the higher volume of the two wheeler lubricant market.

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