Chinese PCMO and HDMO markets: Recovery and emerging sales channel opportunities

ABSTRACT

The Chinese passenger car motor oil (PCMO) market is projected to recover and grow over the next five years. While traditional lubricants marketing channels will continue to be the mainstay, new alternative channels are providing opportunities for greater growth as people adapt to a post-COVID-19 world. Currently, alternative channels account for less than 10% of the PCMO market. However, they are projected to double by 2025 as consumers embrace these new means of vehicle services and lubricants procurement. These new channels include OEM garages, online to offline and other Internet platforms and car-sharing platforms. The growth in these alternative channels has helped them migrate from lubricant procurement from smaller second- and third-tier lubricant distributors to first-tier distributor or direct sales from lubricant marketers. Third-tier distributors are most likely to lose the greatest volume from this shift, and these distributors will be forced to adapt their business model to more of a logistic-only service, as they will lose some of the lubricant's sales aspect of their current business.