The global automotive coolant market is characterized by the presence of many global, regional, and local players. The market is highly competitive with all the players competing to gain maximum market share. Rapid advancements in processes, volatile raw material prices, the expanding automotive industry, and the increasing demand for automotive coolants in the aftermarket services are the key factors that influence the regional market growth. The vendors compete based on cost, brand identity, product quality, and availability and reliability of the products. It is crucial for vendors to provide cost-effective and high-quality products that adhere to the requirements of the OEMs as well as the ASTM standards to compete in the market. To establish their market position, the key players are adopting advanced manufacturing technologies for coolant production and introducing innovative and efficient products for automobile applications. For instance, in August 2019, Old World Industries, LLC announced the launch of the “PEAK Antifreeze + Coolant” product, designed with an advanced formula and specially engineered with an advanced proprietary formula that includes a combination of scale-fighting inhibitors and organic acid corrosion inhibitors guaranteeing superior lifetime protection against scale and corrosion.
Valvoline LLC, Prestone Products Corporation, Chevron Corporation, OLD WORLD INDUSTRIES, LLC, Total, Royal Dutch Shell plc, Recochem Corporation, Arteco, Motul, ExxonMobil Corporation, BASF SE, and AMSOIL INC. are some of the leading market players in the global automotive coolant market. Among these, Valvoline LLC, Prestone Products Corporation, OLD WORLD INDUSTRIES, LLC, Total, Motul, and Chevron Corporation (comprising both domestic and global players) account for the majority of the global market share, owing to their high revenue generation, availability of raw materials at competitive prices, strong brand identity, partnerships with the leading automotive OEMs as well as the aftermarket service providers, and wide distribution networks. However, these players need to strive hard to maintain their market positions, considering the presence of other global players in the regional market.
The growth of market players is dependent on market conditions, regulatory standards, and industry development. Thus, the players should focus on launching new products as per the changing market needs and try to expand their regional foothold via strategic partnerships & agreements with the automotive OEMs and service providers as well as the distributors in the global market.
The high competition among the players has encouraged the production automotive coolants that are unique in the market and serve the OEM and aftermarket applications. The technologies and processes used vary with the vehicle type and desired function. For instance, for passenger cars and heavy-duty vehicles, the companies are offering different products with varying compositions of the base (glycol) and the technology (OAT, hybrid or conventional). Thus, product development by companies helps in the development of new and innovative techniques and processes for better efficiency and higher performance. The players operating in the global automotive coolant market are adopting various strategies such as expansion, product launches, joint ventures, and agreements to maintain their positions and increase geographic presence.
The key players in the market have adopted growth strategies such as expanding the existing product portfolio, bringing the existing products to new markets, and active product portfolio management to increase market share and improve competitive positioning in the regional markets. Some of the players are planning to work in co-ordination with the customers to develop and manufacture customized coolant products. Furthermore, these players are required to maintain the standards set by the American Society for Testing and Materials (ASTM International).
Date
Approach
Developments
September 2019
Expansion
BASF announced its plans to introduce its Glysantin branded engine coolant products in the North American automotive industry in January 2020. The capital investments at its production site in Cincinnati, US, are underway and will begin production and sale of automotive coolants from January 2020. BASF will primarily focus on supplying factory fills for original equipment manufacturers (OEMs) in the North American market.
September 2019
Agreement
BASF and Old World Industries (OWI) signed a strategic agreement, under which OWI will be the sole distributor and strategic partner of BASF Glysantin automotive coolant/antifreeze products in the North American market. Under the agreement, OWI will offer BASF Glysantin automotive coolant/antifreeze products through the OWI portfolio of brands for service and aftermarket applications.
August 2019
Product Launch
OWI announced the launch of the “PEAK Antifreeze + Coolant” product, designed with advanced formula and specially engineered with an advanced proprietary formula that includes a combination of scale-fighting inhibitors and organic acid corrosion inhibitors guaranteeing superior lifetime protection against scale and corrosion.
April 2019
Distribution Agreement
Castrol made two new distribution agreements, under which Pilot Thomas Logistics and Northeast Lubricants will distribute a range of Castrol products for use in commercial vehicles, including engine oils, gear lubricants, and coolants in southern New Jersey, Delaware, Pennsylvania, Maryland, Virginia, and Washington DC.
July 2018
Product Launch
OWI announced the launch of a new line of vehicle-specific antifreeze/coolant, the “PEAK ORIGINAL EQUIPMENT TECHNOLOGY Antifreeze + Coolant”. This 'OET' product line was formulated to meet the specific technology needs of the vehicles in North America, Asia, and Europe. The product launch has offered retailers, commercial partners, and customers, a super-premium coolant option.
May 2018
Investment
Valvoline announced its plans to build its first blending plant in China, with an expected investment of approximately USD 70 million. It is Valvoline’s single-largest investment worldwide. This new plant will cater to the rapidly growing demand for high-quality lubricants and coolants by the Chinese passenger car and heavy-duty customers. The production at the plant is expected to begin by the end of 2020.
May 2018
Product Launch
OWI announced the launch of its new heavy-duty coolant “Hybrid Blue”, a Hybrid Organic Acid Technology (HOAT) Extended Service Interval (ESI) Coolant/Antifreeze with a phosphate-borate dual-buffer system and low silicate levels. This product has been formulated for use in all heavy-duty engines, regardless of fuel type, as well as for automobile and light-duty applications.
April 2018
Product Launch
Recochem Corporation launched a new HD Expert line-up of engine antifreeze/coolant for the US and Canadian markets in the first quarter of 2018. These specially formulated products are manufactured to serve heavy-duty engines in the market.
January 2018
Product launch
Prestone Products Corporation launched a new range of antifreeze/coolant products specially developed for imported cars (Asian and European cars). This new line features three unique formulas, one for Honda and Nissan vehicles; one for Hyundai, Kia, Lexus, Toyota, Subaru, and Scion vehicles; and one for the European models, i.e., Volkswagen, BMW, Audi, Volvo, and Mercedes.
Threat of New Entrants
The raw materials required to produce automotive coolants are easily available in the global market. However, there are strict standards (ASTM standards) pertaining to the use of glycols (ethylene glycol and propylene glycol) for producing coolants for OEMs. Moreover, the increasing production and sale of automobiles in Latin America and the Middle East & Africa and the increasing sale of commercial trucks and heavy-duty vehicles in the US (North America) and Asia-Pacific are expected to boost the demand for coolants and incentivize the entry of new players in these regional markets as well as the global market. The increasing need for the development of advanced products in line with the requirement of OEMs, is further expected to boost the entry of new players. However, the presence of established coolant producers with wide distribution and sales networks, and strong brand image (PEAK, Valvoline, Castrol, and PRESTONE) are likely to be the key challenges for the new entrants in the market.
Considering the aforementioned factors, the threat of new entrants in the global automotive coolant market is expected to be moderate to high.
Rivalry
The intensity of competitive rivalry in the global automotive coolant market is estimated to be high. There are a large number of producers of automotive coolants in the global market. However, the market is dominated by some of the major players, such as Valvoline Inc., Prestone Products Corporation, Old World Industries, LLC (PEAK), and Chevron Corporation. The market is mainly consolidated in Asia-Pacific, owing to the large base of the automotive industry in China, India, Japan, and in the ASEAN economies. The surge in demand for automotive coolants, especially OAT and Hybrid, with OEM-approved nitrite, amine, phosphate, and silicate-free formulations in the OEM and aftermarket applications are likely to favor the market growth in the coming years.
The manufacturers are adopting various strategic initiatives to establish their market position. For instance, in September 2019, BASF announced the plan to introduce its Glysantin-branded engine coolant products in the North American automotive industry in January 2020. Capital investments in its production site in Cincinnati, US, are underway, and the site is expected to be functional by January 2020. BASF will primarily focus on supplying factory fills for OEMs in the North American market.
Threat of Substitutes
The threat of substitutes in the global automotive coolant market is estimated to be low. There are no effective alternatives available for coolants in internal combustion engine-based automobiles. However, there are internal alternatives to coolants, such as OAT and hybrid coolants, that are increasingly preferred over the traditional coolants.
The thermal battery management system used in electric vehicles () is a likely to be a substitute to coolants in the years to follow. It is expected to be a minor challenge for the suppliers of automotive coolants in the coming decade.
Bargaining Power of Suppliers
The suppliers in the global automotive coolant market are manufacturers/suppliers of raw materials, such as ethylene glycol and propylene glycol. The global automotive coolant market comprises a large number of producers and distributors of these raw materials. The demand for automotive coolants in the global market is projected to increase owing to the increasing sale of commercial vehicles in the US and Asia-Pacific and the fast-growing automobile production in emerging economies across the globe. Moreover, the unavailability of effective substitutes for coolant production and growing preference for popular coolant brands are further likely to increase the bargaining power of the suppliers. To overcome the challenges of fluctuating raw material prices and the availability of raw materials, the market players enter into long-term agreements with raw material suppliers.
Considering the aforementioned factors, it can be concluded that the bargaining power of suppliers is estimated to be high during the assessment period.
Bargaining Power of Buyers
Automotive coolants find applications in the OEM and aftermarket sectors. The healthy growth of these sectors in the Americas and Asia-Pacific is likely to boost the demand for coolants in the coming years. The presence of a large consumer base, growing preference for popular coolant brands, and the absence of close alternatives are factors expected to limit the bargaining power of buyers. However, a quality product offering from global players, such as Chevron Corporation, BASF SE, Total, and Royal Dutch Shell plc, at similar costs offers options for the buyers to switch toward them and likely to increase their bargaining power. Considering all the above factors, the bargaining power of buyers in the global automotive coolant market is estimated to be moderate.
