April 25, 2006

Quick lube market booming in China

Little Falls, New Jersey – A new study by Kline & Company reports that quick lube centres now comprise the fastest-growing sector of the consumer automotive lubricants market in China, as drivers eschew dealerships or corner garages. Annual growth of 17 per cent is expected over the next five years.

“Traditionally, Chinese car owners would go to the dealership or buy motor oil at a store and take it to a garage for changing, but as the quick lube concept becomes more widespread, people are opting for a standardized level of service at a lower price than the car dealerships offer,” says Li Wang, director of Kline’s office in Shanghai. “Like in the more mature markets in Europe and the U.S., Chinese quick lube centres offer convenience with the oil included in the price of service, but virtually all locations need to offer extras like car washes and small repairs to make the business profitable.”

Kline’s report states that new-car purchases in China are expected to grow at 10 to 15 per cent a year over the next five years, which will boost consumption of consumer automotive lubricants; as well, the Chinese government is working to upgrade the standard of car repairs by eliminating thousands of “mom-and-pop garages” across China. Currently, the largest quick lube company is Caltex, with more than 2,000 franchised garages.

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