AEC set to boost lubricant demand

With the ASEAN Economic Community (AEC) coming into play, established lubricant suppliers expect a boost in the automotive sector. How will the AEC bloc impact the lubricant industry? Japnit Singh, Senior Director of Spire Research and Consulting, shared his insights on key trends in Lube Report Asia’s magazine.

With the establishment of AEC due this year – it signifies a major step towards a free-trade zone. This 10-nation bloc will ensure free movement of goods and services, investment, flow of capital and skilled labor.

At the same time, Singh remarked that slashes in high duties (up to 30-40 %) on automotive sector will result in increased demand for lubricant oil – forecasted to reach 3.5 billion liters by 2016.

As a result, it is expected to lead to greater demand for Japanese automobiles that are assembled in Malaysia, Indonesia and Thailand. Furthermore, such developments could make ASEAN the world’s fifth-largest auto market as demand for automobiles continue to soar at an expected 8% annually.

On the other hand, major markets such as Thailand, Indonesia and Vietnam still impose import duties on lubricants. Singh opined that once the AEC is established – it aims to eliminate tariffs on lubricants and automobiles. However, new entrants possibly face stiff competition from domestic petrochemical companies due to their strong foothold over retail channels.

Needless to say, the free-trade zone could bring about changes to supply side of the lubricant sector as well. Mergers and acquisitions are likely due to regional integration providing labor, tax as well as market advantage. Furthermore, companies might emphasize both supply chain and marketing due to expected increase in demand and low production cost. Supply chains would become more effective as the production facility and exporting country can be placed within the same country.

https://www.spireresearch.com/newsroom/media/aec-set-to-boost-lubricant-demand/

Comments

Side Click: Are you under the surveillance camera?

Identifying VIPs with strong purchasing power is crucial to retail success. More often than not, retail staff fail to do this in time. Facial recognition technology can help prevent this. But does it put our privacy at risk? With high-spending customers making out-sized contributions to retail profitability, it is increasingly crucial for retailers to provide personalized customer service the minute a VIP customer sets foot in the store. For instance, Katie Holmes reportedly spent USD100,000 on a fashion makeover and USD14,200 on lingerie alone in 2012! This is where identification technology can play a role. NEC, a Japan-based ICT vendor, has developed an identification application based on a facial recognition system – comparing the individual’s facial features against its database, and sending prompts when a match is identified. The initial purpose of the application was to help identify terrorists and criminals , but it was subsequently adapted to the retail setting....

The Philippines - Asia's next economic powerhouse

The Philippines is emerging as one of Asia’s most dynamic economies, with a forecasted growth rate of 6.9 per cent in 2018 driven by investment and private consumption. The economy recorded growth of over 6 per cent in 2017, for the sixth straight year, thanks to buoyant government spending, exports and a recovery in the agricultural sector. Will this Southeast Asian tiger be able to maintain its momentum? A growing economy While advanced economies like the United States, Europe and Japan are growing at slow rate, a number of emerging economies like the Philippines continue to surge ahead. With annual growth expected to reach 6.9 per cent by 2018, the Philippines now ranks as the 10th fastest growing economy globally. Owing to strong domestic demand and government projects, the country’s economy is on the rise. The government’s expansionary fiscal policy has aided capital formation and credit growth, whereas low inflation has strengthened private consumption. Path...

Ghana citizenships to boost economy

In November 2019, 126 African-Americans and Afro-Caribbean’s were granted citizenship, in a ceremony that marks 2019 as the Year of Return. 500,000 tourists are expected to visit Ghana during the Year of Return, a considerable increase from the 380,000 that visited in 2018. Visa on arrival for some and waive off of Visa charges have been introduced. The government also plans to invest in educated returnees to help boost the economy through employment. Is investment in human capital the way to boost Ghana’s economy? Read more: https://www.spireresearch.com/newsroom/spirethoughts/ghana-citizenships-to-boost-economy/

Is a Korean peace treaty on the cards?

The historical and unprecedented meeting between the two leaders of Korea is a monumental development. Can both leaders use this opportunity enhance geo-political stability and open up new economic development possibilities? Leon Perera, CEO of Spire Research and Consulting, shared his thoughts in The Business Times – Views from the Top section on 7 May 2018. Marking a remarkable change, the unprecedented meeting between the leaders of the two Koreas underlines the possibility of a peace treaty and denuclearization agreement. However, Perera expressed scepticism about North Korea’s commitment to completely renounce nuclear strike capability against Japan and South Korea, since this is the only factor ensuring regime survival. World leaders need to take this chance to limit the North’s nuclear capability while accepting that it may never be completely voided, bring the North into the global framework and work towards economic development on the Korean peninsula. Read...

Congestion stops traffic in SEA’s megacities

44 million people are being added to Southeast Asia’s urban population each year. As motor vehicle populations keep doubling every 5 to 7 years, what measures are being taken to tackle traffic congestion? Japnit Singh, Senior Director, Singapore and India of Spire Research and Consulting shared his insights in China Daily – Asia Weekly. Southeast Asia’s middle-class continues to boom, fuelling car population increases despite the relative lack of infrastructure. According to the Asian Development Bank, the region’s major cities suffer from some of the highest air pollution levels globally – as much as 80 per cent being attributable to road transport. Singh cautioned that building roads is not a solution, as this region faces severe practical limitations and escalating costs due to shortage of land in urban areas. In Bangkok for example, roads have the capacity for two million motor vehicles whereas five million ply the city’s roads each day. This has led to the military g...

The Knowledge to Decide

Search This Blog