In recent years, China’s huge consumption of refined oil has attracted more and more foreign-funded companies to invest in China. In the early opening of the lubricants market, foreign companies first seized the high-end product market; in the refined oil distribution market, foreign companies accelerated the construction of downstream distribution networks. In the field of refined oil sales in China, foreign-funded companies accelerate their development from the point of view and surface, and foreign companies’ industrial chains and organizations are gradually improving.
Lubricant Market: Foreign brands monopolize 75% of China's high-end automotive market
In the early opening hours and higher degree of openness of lubricants, from the beginning of the 1990s, some well-known foreign-funded lubricants companies used the opportunity to provide matching lubricants for the initial installation of imported vehicles, along with their domestic automakers. Enter China. Subsequently, they formed an exclusive monopoly of lubricant oil by means of a brand designated by a special vehicle maintenance factory to consolidate the automotive aftermarket lubricant market. At the end of the 1990s, ExxonMobil, Shell, BP, Total, Caltex and other companies made great efforts to enter the Chinese market. After China's accession to the WTO, South Korea's SK, LG, Japan Petroleum, China's Taiwanese oil, the United States ConocoPhillips, Malaysia's national oil companies, etc. are also actively entered, and they all target the product in the high-end market.
At present, the vast majority of famous international lubricants manufacturers have entered China, and more than 30 lubricating oil blending plants have been established in China, with a total production capacity of more than 1 million tons per year. They rely on their capital, technology and brand advantages to control the high-end market for China's automotive lubricants. At the peak of the end of 2003, foreign brand lubricants accounted for 22% of the domestic market, and accounted for 80% of the market for premium lubricants and oil additives for vehicles.
Since 2003, the domestic Great Wall, Kunlun and other lubricant brands have begun to exert force. They have adopted strategies such as working closely with auto companies to rob the market from the source and recapture some of the high-grade lube oil market. The share of foreign companies' high-grade lube oil market has dropped to Last year's 60%.
In order to control the strong offensive of domestic lubricant brands, foreign companies adjusted downstream marketing strategies and strengthened cooperation with auto companies in an effort to recover part of the market share.
In June last year, BP's Castrol Lubricant Company and China's commercial vehicle manufacturer Dongfeng Group formed a joint venture to join forces to seize China's lubricant market. In September of this year, Shell acquired 75% of the shares of "Beijing United Petrochemical Co., Ltd." and "Unified Petrochemical (Xiangyang) Co., Ltd.", the largest privately-owned lubricants manufacturer in China and the third largest lubricants company in China. Shell ranked the third place in China's lubricant oil market share. At the same time, the share of foreign companies in China's high-end lubricants market jumped to 75%.
In addition, Chevron Texaco, Total and other famous international lubricant brands control the market of marine lubricants in China's mainland and even China's Hong Kong market, which has long relied on imports in the past. In recent years, the competitiveness of domestic enterprises has increased, and some of the inland rivers and coastal marine lubricants markets have been recovered. However, due to the limitations of their own strength, domestic brands are still difficult to pose a substantial threat to foreign brands.
Distributing of refined oil products: foreign companies implement the "three-step" strategy
Foreign-funded companies have been paying close attention to China's rapidly growing oil market with huge potential. The distribution channel of refined oil, as the most important gateway for the oil industry chain terminal and refined oil products entering the consumer market, has become a hot spot for foreign investment.
Before China's accession to the WTO, only a few large European and American oil companies built a few own or holding gas stations through various indirect ways along the southeast coast. Since China's accession to the WTO, refined oil marketing has become a major area for foreign investors to invest in China's oil and petrochemicals market. With strong European and American companies as the guide, companies in neighboring countries and countries such as the Middle East have followed suit and increased investment in this area.
European and American companies have adopted a "three-step" strategy in China and become the main force for investment in China.
The first is that BP, Shell, Exxon Mobil and other European and American oil giants borrowed from the two major Chinese oil companies listed overseas at the beginning of the century and entered the refined oil sales field ahead of time as a strategic investor.
The second step is before and after the release of the refined oil retail market in China, the European and American companies jointly formed joint ventures with major domestic companies. In 2004, Shell and BP formed a joint venture with China National Petroleum Corporation and Sinopec Corp. to build a total of 1,500 gas stations. Subsequently, ExxonMobil, Total, etc. also accelerated the joint venture with major domestic companies to build a refined oil retail network. As of June of this year, BP, Shell, ExxonMobil and Total were allowed to establish 8 joint ventures with PetroChina, Sinopec and Sinochem respectively in Jiangsu, Zhejiang, Guangdong, Fujian, Bohai Bay and East China. In developed regions, a joint venture will build 3,700 gas stations. After Total opened its downstream market in 2007, Total will also build 200 licensed gas stations in East China.
The third step is that foreign companies begin to acquire private gas stations and build wholly-owned oil sales companies. In April 2005, Shell and its private company, Haitian Investment Co., Ltd., jointly established Sichuan Shell Fuel Co., Ltd. for the first time. Earlier this year, Shell and Chongqing Shuorun Petrochemical negotiated the establishment of a joint venture oil company to operate the gas station business. In the same period, Shell established the first wholly foreign-owned refined oil sales company in Qingdao. As of the end of 2005, Shell had more than 70 gas stations of its own brand in China, an increase of nearly 40 from the end of 2003. The sales of refined oil will be one of the focuses of Shell's investment in China in the next few years. Shell plans to build 1,000 gas stations in China by 2010. In addition, Chevron Texaco’s subsidiary Caltex will also set up a wholly-owned oil company in South China to engage in retail operations of gasoline, diesel, lubricants and liquefied petroleum gas. BP is also brewing a wholly-owned gas station.
With the large-scale entry of European and American oil companies, oil companies in China's neighboring countries and countries in the Middle East are not far behind and are actively exploring the Chinese refined oil market. South Korea's SK, LG and other companies are in close contact with China's relevant departments, and hope to build a refined oil sales network in China's economically developed regions. SK began construction of 12 integrated gas stations in Shenyang last year and plans to build more than 20 integrated gas stations in China this year. At the same time, the company plans to establish a joint venture with Sinochem International to build 200 gas stations in Shandong, Jiangsu, Zhejiang, and Shanghai.
Petroleum companies in the Middle East, Russia and other resource regions and countries are also very concerned about the Chinese refined oil market. Since 2005, they have set up offices in China. With the commencement of the Fujian Refining and Chemical Integration Project, Saudi Aramco and ExxonMobil have been allowed to establish a joint venture refined oil sales company in Fujian to sell the refinery products.
Automotive after-sales service: new profit growth point for foreign capital expansion market
In addition to the oil sales business, foreign oil companies have actively seized the field of automotive after-sales services in China in the past two years, expanded non-oil sales business, and complemented and supported each other with the oil product sales business, becoming a new profit growth point for the company.
In the field of automotive after-sales service, SK Group provided trials of professional auto repair services at 40 gas stations in Shandong Province in 2003, and set up a joint venture in China last year to carry out various types of automotive services, including vehicle maintenance, emergency rescue trailers, and automobiles. Supplies sales. SK plans to open 100 car repair chain stores in major cities such as Beijing and Shanghai, and then open 10,000 car repair hypermarkets within five years. The business involves new car sales, used car transactions, auto supplies stores and car maintenance centers. Shell plans to establish a lubricant oil change service chain in China. It will establish 600 service outlets within 10 years to comprehensively promote oil change and other maintenance services.
In terms of non-oil sales, the gas stations of foreign companies not only provide sales of fuel oil and lubricants, but also provide a variety of non-oil business such as merchandise, catering, welfare lotteries, car beauty, station billboards, and light box rentals.
Wholesale market liberalization: foreign companies will increase investment in me
With the liberalization of the refined oil wholesale market at the end of this year, foreign oil companies will acquire the right to wholesale and import and export of refined oil products. It is expected that foreign companies will further accelerate their investment and fully deploy the refined oil market in China.
Foreign-funded companies will continue to improve the sales network in economically developed areas such as the southeastern coastal areas and begin to expand into the mainland and western regions. Foreign-funded companies will accelerate the acquisition of social gas stations, accelerate the establishment of wholly-owned oil sales companies, and increase the capital of previously established joint venture companies. Expansion of shares will enable more independent development; foreign companies will also focus on strengthening non-oil sales business and launch their effective marketing strategies in the long-term internationalization process.