Automotive Engine Oil Market Trends

Growth Drivers

• Demand for high-performance & premium lubricants: Rising consumer awareness about engine maintenance, and growing disposable incomes, especially in emerging markets, are increasing demand for high-quality synthetic and semi-synthetic oils that extend engine life and improve performance.  In this regard, Castrol India Limited in June 2024 reported that it has unveiled an expanded Castrol EDGE range of premium high-performance engine oils for passenger cars. The launch introduced three new synthetic variants, i.e., EDGE hybrid, EDGE euro car, and EDGE SUV, which are engineered to exceed the highest industry standards and deliver at least 30% improved performance. It is backed by a high-visibility national campaign wherein Castrol explicitly linked product innovation with India’s increasing preference for premium, high-quality engine oils, hence benefiting the automotive engine oil market.
• Stringent emission regulations & fuel-efficiency standards: Administrative bodies across the globe are pushing manufacturers to adopt low-viscosity and low-friction oils that help reduce emissions and meet fuel-economy driving business in the market. Testifying to this, the American Petroleum Institute illustrates how stringent emission and fuel-efficiency standards are shaping lubricant requirements through the introduction of API SQ in March 2025, which aligns with ILSAC GF-7A and emphasizes improved fuel economy, enhanced emission-control system protection, and low-temperature pumpability. Besides, the API SQ and earlier progressive categories, such as SP, SN, and others, show a clear regulatory-driven evolution toward low-viscosity, low-friction oils which are designed for modern engines, ethanol-containing fuels (up to E85), and tighter emissions compliance.
• Engine technology advancements: The aspect of modern engines, such as turbocharged, direct-injection engines have the capability to operate at higher pressures and temperatures. This, in turn, necessitate formulations to reduce friction and enhance fuel efficiency. In this regard, in August 2025, TotalEnergies Marketing India Pvt Ltd announced that it has launched the new Quartz engine oil range in India, which is certified to the latest API SQ and ILSAC GF‑7 standards, especially designed for modern engines, such as turbocharged and gasoline direct injection systems. Besides, the company also notes that these advanced lubricants are engineered to operate under higher pressures and temperatures, thereby providing up to 40% improved LSPI protection, better timing chain wear, enhanced piston cleanliness, and up to 16% improved fuel efficiency. It is also compatible with older engines, hence benefiting the automotive engine oil market.

Challenges

• Transition to electric vehicles: The increasing adoption of electric vehicles is hampering growth in the market since EVs do not require engine oil. Governments across the world are promoting EV adoption through suitable subsidies, emission regulations, and a ban on internal combustion engine (ICE) vehicles. Therefore, this shift reduces the demand for engine oils, which are used in passenger cars and commercial vehicles. In addition, automotive manufacturers are continuously making investments in the EV platforms, in turn causing obstacles to the ICE vehicle production. Further, as EV penetration increases, engine oil manufacturers must diversify into alternative lubricants, such as transmission fluids and thermal management oils, to sustain long-term growth.
• Extended oil drain intervals: Advancements in terms of engine technology and lubricant formulations increased the oil drain intervals, reducing the frequency of oil changes. Besides the modern synthetic and semi-synthetic engine oils, which report superior thermal stability, oxidation resistance, and wear protection, allowing vehicles to operate longer between oil replacements. In this context, automotive manufacturers currently recommend extended service intervals, sometimes exceeding 15,000 kilometers, which directly lowers overall oil consumption per vehicle. This trend is especially visible in developed markets where newer vehicles dominate the fleet. Meanwhile, this aspect of extended drain intervals might benefit consumers, but it’s a major challenge for manufacturers in the automotive engine oil market, who must compensate through premium pricing or value-added products.