As India, the world’s third-largest market for lubricants after the U.S. and China, shifts from Bharat Stage (BS) IV emission rules to stricter BS VI norms from April 2020, Castrol India aims to lead the transition. The automotive and industrial lubricant maker says its experience from the Euro 6 standards implemented in Europe a few years ago will come in handy in this regard. The company in July launched BS VI-compliant lubricants. Kedar Apte, Castrol India’s vice president (marketing), speaks to Fortune India about the company’s growth story in the country and the ongoing slowdown in the auto sector in an email interview. Edited excerpts:
From BS IV to BS VI, how difficult has been the transition for you?
Through our experience being in India for over a century and our global technology expertise, we have consistently delivered technologically superior, premium lubricants that offer differentiated and significant consumer benefits. We are happy to say that we have been the first company in India to launch a range of lubricants across all automotive spaces—for two-wheelers, passenger cars, and commercial vehicles—to usher in the new BS VI era. For this, we worked closely with our global technology and R&D (research and development) teams; based on their substantial insights from the Euro 6 transition in Europe a few years ago, we also optimised the products keeping in mind the unique challenges that India presents, including traffic conditions, lower highway speeds, regular stop-start situations, and traffic jams.
How are BS VI-compliant lubricants different? What are the cost implications for customers?
Lubricants for BS VI [engines] use superior quality base stock with lower evaporation loss, which contributes to lower emissions and a lower carbon footprint. Performance additives are used in BS VI lubricants with enhanced oxidation stability and wear control as compared to earlier generation lubricants. Lower SAPS (sulphated ash, phosphorus, and sulphur) in BS VI lubricants help improve the longevity of the exhaust after-treatment devices, which help in the durability of the emission system. We have been able to manage to control our costs and hence been able to keep prices same or similar in most cases.
What do you think is required for the entire ecosystem so that the transition is successful?
Lubricants have a key role to play in the transition to BS VI norms. Also, it is important to understand that the transition to BS VI norms is a journey. We began this journey a few years ago by learning and extracting relevant insights from our global experiences of Euro 6 standard implementation in Europe. Leveraging these insights, we optimised BS VI-ready products, keeping in mind the unique challenges that India presents. Also, the transition doesn’t just end with the products, it’s important to include key stakeholders such as the mechanic community to gear up for this change and understand the changing automotive technology. As part of our awareness and education programmes, mechanic training programmes related to this key transition are underway, with a plan to reach 250,000 mechanics nationally.
The auto industry is facing a chronic slowdown. Do you see a recovery in sight?
The fundamentals of the Indian economy are still very strong and we are hugely optimistic about the potential of the auto industry. Our estimate of 90 million new vehicles being added to the vehicle parc over the next five years still holds. We welcome the recent initiatives by the government and expect that it will be a matter of time before we start seeing a recovery. We are happy to support the government of India’s sustainability agenda and are committed to providing solutions that can help achieve a low-carbon future.
Would electrification have much impact on your operations?
We look at electrification as a great opportunity, not as a challenge. Hybrid and electric vehicles (EVs) will require fluid engineering to operate seamlessly. Also, the shift of EVs is going to be gradual. The BP Energy Outlook estimates that even in 2040, while EVs will continue to grow, more than 80% of the vehicles on the road will continue to be internal combustion engine-based globally. In India, we expect about 90 million vehicles to be added to the current vehicle parc in the next five years. We are looking forward to take advantage of the shift to hybrids and EVs. From engine oils to greases, and coolants to brake fluids, our products are expected to be extremely relevant for the mobility revolution.
How do you deal with the competition and differentiate yourself?
Lubricant is not a touch-feel category and hence does not enjoy the benefit of appealing to the consumers aesthetically. We invest in strengthening loyalty for our brands by focussing on both rational product benefits as well as on emotional affinity with consumers and influencers. Being a century-old brand, it is important to keep reinventing ourselves to stay relevant and top of the mind for our customers and consumers. The bedrock of all this is our focus on pioneering technology and constantly offering technologically superior and differentiated products according to the changing needs of our consumers. Castrol has continued to associate itself with the young age Indian through sports as part of its marketing strategy.