Castrol India Ltd. is one of India’s leading lubricants company and has established itself as a pioneer and innovator in the Indian lubricants industry. Castrol brands have been available in India for over a hundred years and next year the company will be celebrating hundred years of operations in the country.
We spoke to Mr. Omer Dormen, Managing Director, Castrol India Ltd., to identify & examine the developments, such as new product launches, expansion, technology and the impact it has in the demand-supply scenario of automotive lubricant market in India.
Excerpts:
Upgrading to BS-VI & beyond
The introduction of BS-VI emission norms in India is a great step forward in reducing pollution and therefore we welcome the legislation. Whilst the legislation is a significant challenge for the Indian automotive industry. At Castrol, we are ready to support all OEMs in meeting this challenge. From a functional perspective, the change from BS-IV to BS-VI will require lubricants that are compatible with the after-treatment devices being adopted by OEMs, as well as the ability to cope with more stress as a result of internal emissions control technology. This means new products specially formulated for the Indian market, with lower SAPs (sulphated ash and phosphorous) while maintaining durability.
The good news is that this while there are undoubtedly unique challenges for the Indian market in meeting BS-VI limits, this journey is largely already known, and Castrol is able to leverage its global experience of developing products to meet similar legislation changes in Europe. We are actively partnering with key OEMs in India and have development projects underway to ensure BS-VI compatible lubricants will be available.
Evolving products for India
The history and evolution of Castrol in India has been inextricably linked to the evolution of the automobile industry. One aspect of the evolving emissions legislation in India is efficiency. CAFC phase 1 was implemented in 2017 and introduced an average fuel consumption limit of 130 g/km of CO2 for OEMs. The average limit is set to reduce further in 2022 to 113 g/km of CO2. With fiscal penalties on OEMs for non-compliance, any opportunity to increase the efficiency of engines is incredibly valuable to OEMs, and the lubricant is an important enabler. If you can improve the efficiency of an internal combustion engine by just a few percent, then it’s really worth doing, and Castrol has a strong track record of delivering this performance to Indian OEMs through advances in lubricant technology.
For example, in 2015 Castrol launched a new product Castrol RX Fuel Saver 10W-40, a co-engineered product in deep collaboration with Tata Motors Ltd., designed to deliver 3% increase in fuel economy while maintaining durability in Tata trucks. The product was specially developed by Castrol and rigorously tested both in the laboratory and on road in India and was proven to both increase efficiency and be tough enough to withstand the huge pressures faced by trucks on Indian roads. Castrol has similar collaborations with other key OEMs, continuing the trend to introduce thinner yet more durable lubricants to make the internal combustion engine more efficient.
Long drain life vs. initial volume
Castrol was the first company in India to introduce a long drain multigrade engine oil – Castrol GTX – approved by Maruti when it first launched its cars in India. Over the years, Castrol has continuously endeavoured to provide longer drain products based on customer needs, a recent example being Castrol Vecton Long Drain. These oils are specially formulated to maintain performance throughout extended drains and have been tested against the toughest industry and OEM specifications for long drains.
Looking to the future, significant growth is expected in the Indian vehicle space. Even though new technologies such as battery electric vehicles will play a key role in supporting this growth while meeting ever-stringent efficiency targets, the internal combustion engine is expected to remain dominant for decades to come. Therefore, continuously improving efficiency is crucial, while maintaining durability. This will lead to ever-increasing demand for premium products.
Market reach & penetration
As per market estimate, the volume contribution of commercial vehicle segment to the overall lubricant business is 30% globally and more or less the same in India. The contribution of industrial segment to the overall lubricant business globally is 45% whilst in India it is 52%. The contribution of personal mobility (cars and two-wheelers) segment is 24% globally and 16% in India.
The company also has the largest manufacturing and distribution network with three manufacturing plants and a distribution network of 350 distributors who sell to consumers and customers through over 100,000 retail outlets. The company also leverages its distribution network to reach a wider network through Castrol Bike Points, Castrol Car Care, Castrol Pit Stops, Castrol Authorised Service Associates and Independent workshops. Castrol sub-distributors also reach additional outlets in rural markets whilst the company also directly services over 3,000 key institutional accounts.
Distribution activity
Over the years we have established the strongest manufacturing and distribution network in the country. Castrol was responsible for setting up the retail channel – which is today known as the ‘bazaar’ trade, which is the widest distribution channel in the country. In addition to the retail outlets and B2B business channels, consumers can also get our products at Castrol Bike Points, Castrol Pitstops and Castrol Car Care centres across the country.
Castrol India manufactures and markets automotive, industrial and marine & energy lubricants which are distributed through more than 350 distributors from over 100,000 retail outlets. The company has a comprehensive and innovative outreach programme to connect and engage with key consumers, customers and influencers. Castrol’s on ground activation program, Udaan, involved over 150,000 engagements with Truck Consumers, mechanics and dealers. Castrol’s activation program for tractor owners has also reached 190,000 consumers across 2017 in over 2500 villages, 250 Mandis and 1,600 retailers, to reinforce the brand proposition of Castrol CRB Plus 400 Hours of Protection.