Daewoo enters Indian lube market, aims to get 2% share by March next year

South Korean conglomerate Daewoo on Tuesday entered the Indian lubricant market with an aim to grab two per cent market share, in volume terms, by the end of this financial year.

 

The company has adopted a phased rollout strategy, starting with key metro cities and Tier-2 towns, backed by a robust dealership and distribution network.

 

For its India foray, Daewoo has entered into a strategic licensing agreement with Mangali Industries.

 

A manufacturing facility in Wada, Maharashtra, with a production capacity of 40,000 metric tonnes per annum, has already been set up. The capacity of this plant could be expanded 2.5 times on the three acres of available extra land, Sorrabh Goyel, director, Mangali Industries told Business Standard.

 

Goyel said Daewoo Lubricants would also be setting up a manufacturing plant in Gujarat with a production capacity of 50,000 metric tonnes per annum. While the Maharashtra plant will be mainly used to manufacture automotive lubricants, the Gujarat plant will be used to develop industrial lubricants, he informed.

 

“In this financial year itself, we are expecting to record an annual turnover of ₹200 crore and above. In five years, our turnover should be between ₹700-₹1,000 crore,” he noted. The company will also start exporting items, he said, from both of its plants to countries in Southeast Asia and Africa from this financial year itself.

 

The Maharashtra plant will have research and development (R&D) labs to develop formulations tailored for Indian conditions. Daewoo is targeting a two per cent share of the Indian lubricant market by the end of this financial year and plans to build strategic partnerships with local service providers and OEMs to strengthen its B2B (business-to-business) and B2C (business-to-consumer) footprint, Vineet Singh, director for Strategy and Growth, Daewoo Lubricants said.

 

Goyel mentioned the company would first be expanding its distribution presence in the north and west of the country. It will focus on the east and south of the country after three to four months.

 

He stated that decades of expertise between the two partners (Mangali and Daewoo) ensures that creating a space in the crowded lubricant market of India will not be a challenge. “In terms of technology or cost of production, we are definitely more competitive than others,” Goyel noted.

 

Daewoo Lubricants also outlined an aggressive marketing strategy for its India entry, focusing on competitive pricing and incentives for mechanics and distributors, including foreign trip schemes. The company aims to build demand from the “ground up” and boost brand visibility through targeted advertising.

 

It also plans to tap into mass-market consumers and forge ties with oil refineries and major auto players. Additionally, the company plans to leverage the “unaided awareness” of the Daewoo brand - still remembered by many Indian consumers from its earlier presence in the automobile segment - to fast-track brand acceptance in the lubricants space, its executives mentioned.

 

The India lubricants market size is estimated at 3.01 billion litres in 2025, and is expected to reach 3.79 billion litres by 2030, at a compound annual growth rate (CAGR) of 4.76 per cent during the forecast period (2025–2030), according to Mordor Intelligence.

 

In 2020, the automotive industry dominated the Indian lubricants market, accounting for 58 per cent of the total lubricant consumption in the country. During 2015–2019, lubricant consumption in the automotive industry increased by 35 per cent due to rapidly growing vehicle usage, sales, and production.

 

Automotive is likely to be the fastest-growing end-user industry in the Indian lubricants market during 2021–2026, with a compound annual growth rate of 6.31 per cent, followed by heavy equipment at 3.98 per cent, according to Mordor Intelligence.

 

The India lubricants market is fairly consolidated, with the top five companies occupying about 70 per cent of the market share. The major players in this market are Bharat Petroleum Corporation Limited (BPCL), BP Plc (operating through the Castrol brand), Gulf Oil International, Hindustan Petroleum Corporation Limited (HPCL), and Indian Oil Corporation Limited (IOCL).