Oil demand growth by light vehicles, two-wheelers to slow down
Baku, Azerbaijan, April 5
By Leman Zeynalova – Trend:
Oil demand growth by light vehicles and two-wheelers is expected to slow down over the next 10 years, Trend reports citing Wood Mackenzie research and consulting company.
“The vehicle industry’s shift towards cleaner technology is poised to throw a wrench in the oil market – but likely not for another decade. Demand growth from light vehicles and two-wheelers, a key sector which accounts for roughly 30 percent of the near 100 million b/d in global crude consumption, are expected to slow down over the next 10 years, and eventually begin to decline after 2030, with the rapid adoption of electric vehicles (EVs),” reads a message from Wood Mackenzie.
The company said that EVs are slowly emerging as the substitute for fossil fuel-powered cars. “Sales of EVs have doubled to nearly 2 million units globally between 2017 and 2018, highlighting the transition that is occurring in the auto industry. Yet with total auto sales of almost 90 million – and a global light vehicle stock size of 1.2 billion – EV's impact on oil demand is more long-term in nature.”
In a recent report, Wood Mackenzie's experts weigh in on some of the auto sales trends in Asia Pacific, mainly on Japan, China and India.
Masaatsu Koyama, research director say that in 2018, Japan's new car sales reached nearly 4.4 million units, of which HEVs accounted for over 25 percent and mini cars for more than one third.
“Their share in the country's car population is now nearly half. In response to the rising share of highly fuel efficient vehicles, Japan's 2020 target has already been achieved. As such, Japan's gasoline demand is expected to decline by over 10 percent between now and 2025,” he added.
As for China, Yujiao Lei, consultant, believes that with the introduction of new tax cut for the automotive manufacturing industry in 2019 and household incomes increasing, auto sales are expected to return to growth.
“Our forecast has fuel demand from cars increasing by about 20% through 2025,” he added.
Aman Verma, senior research analyst notes that car sales in India grew 4.1 percent last year.
“Consumers are shifting towards mid-size and bigger cars. Compared to two wheelers, the car fleet and ownership levels were just 32.6 million, or 24 per 1000 people. However, with an expanding middle class and rising incomes, car ownerships levels will increase faster than two-wheeler ownership levels, which should boost gasoline fuel demand in the medium term. We expect fuel demand from the two combined to grow by 0.4 million b/d, over 50 percent from 2018 to 2025,” he said.
Follow the author on Twitter: @Lyaman_Zeyn