Ask anyone in the quick lube or automotive repair industry how the last few years have been, and they might need a minute to collect their thoughts. As with most industries affected by COVID-19, the repercussions of the pandemic have had a long-lasting impact. But it wasn’t just COVID-19 and its economic effects that hurt the industry in the last few years. A series of unfortunate events dovetailed into a perfect storm that mothballed the industry and made running a quick lube or automotive repair shop very difficult.

But now, nearly three years after the pandemic began, things are starting to normalize. Some reports suggest that things may be improving for quick lube and repair shops (though owners are still crossing their fingers). But before we get to the good news, let’s review the perfect storm that encapsulated the lubricant industry from 2020 to 2022 first.

How bad were things for the lubricant industry from 2020 to now?
The pandemic began in 2020 and, as we all know, led to workplace closures, industry shutdowns, work-from-home orders, and widespread unrest and difficulty. Base oil producers swiftly lowered production, which would later cause massive supply chain issues and production problems. As the lubricant world was navigating these unprecedented changes, disaster struck again. A 2021 ice storm along Texas’s Gulf Coast hit Lubrizol’s Deere Park plant, the largest additive producer in the world. This severely impacted the production of finished lubricants and led to more price increases. Many blenders and lubricant manufacturers could not produce certain products and had to remove them from their product lines.

In 2022, prices rose as widespread shortages became the norm. Producers and manufacturers were already struggling with sluggish supply chain issues when things went from bad to worse with the invasion of Russia into Ukraine. As we all know, this caused even more significant problems. The price of oil rose to over $100/barrel, leading to further base oil price increases in the spring for lubricant manufacturers and consumers. By the time the dust settled, a series of price increases had been implemented throughout 2022 by major producers like Shell, Exxon Mobil, and Chevron.

Tragedy struck again in 2022 when severe flooding caused the Afton Chemical plant in Sauget, Illinois, to close. This closure only compounded the severe additive shortage and forced many blenders and producers to deal with widespread shortages of additives, heavy-duty engine oil, and more. Far too many retailers and shops spent significant time sourcing lubricant products, advising their customers on alternatives, or simply removing product and brand lines from their shelves because it was too difficult to order. It was a stressful and confusing time for many.

As 2023 began, retailers, lubricant distributors, and manufacturers were getting used to the new normal. Shelves in the shop were barer than they used to be, and wait times for parts and supplies remained long. But things are starting to improve. Major retailers are starting to get their full product lines up for distribution, and order wait times have decreased. Private-label lubricant manufacturers, which saw increased market share and popularity during the shortages, will now face off against name-brand manufacturers who are once again able to offer customers their full lubricant and additive product lines.

How has the lubricant industry changed?
The difficulties the lubricant and automotive repair/quick lube industry have faced in the last few years have radically changed the industry. While lubricant production is increasing, and getting the supplies you need for your shop or business is becoming easier, there has been a definite industry shift. Here are a few changes we expect to stick around in the lubricant industry.

  • Diversifying production: the supply chain crisis we saw in the last few years showed how vulnerable the industry is to disruptions. Experts predict that manufacturers will begin to diversify their supply chains and production sites. It might be wise for quick lube and small business owners to take less from these manufacturers and cultivate a diverse lubricant product line in the shop from several suppliers.
  • Focusing on local suppliers: The long wait times for supplies and parts have been a massive headache for the auto industry over the last few years. Working with a dedicated local supplier (like us) is a great way to keep your shop stocked and avoid longer wait times.
  • Using data to help manage your inventory. One of the biggest lessons shop owners have learned in the past few years is how essential good inventory management is. Because wait times were so long and lubricant supplies were limited, staying on top of your stock and ordering ahead was necessary to avoid shortages in the shop. We expect smarter inventory management using digital tools will continue to be a priority in shops nationwide.

What has changed for customers?
While the problems plaguing the lubricant industry the past few years have been a headache for quick lube and shop owners, they weren’t the only ones affected. The issues also trickled down to affect average consumers and changed some driving behaviors. Here are a few shifts shop owners should be aware of and prepare for to serve their customers best.

  • Maintenance and repairs are being put off. The supply chain issues and price increases we saw over the past few years trickled down to consumers. According to the consumer price index, car repair costs are up almost 20%, with the average maintenance visit costing between $500-$600. For many consumers, preventative maintenance became an afterthought pushed off until they could afford it. Shop owners can expect more vehicles with more mileage that may be overdue for routine maintenance or repairs.
  • People are keeping their cars longer. The rising costs of new vehicles and interest rates push consumers to hold onto their cars longer. This means that shops need to be prepared for higher mileage vehicles and lubricants for their needs. Adding more specialty lubricants to address these needs to your product line may be a smart idea. Now that supply is improving, many of the lubricant products that were difficult to get are easier to source for shops. Your Greg’s Petroleum service representative can help you build up a diverse lubricant and automotive chemical product line in your shop for your customers’ potential needs.

The last few years have been challenging in the lubricant industry for producers and their customers. While things are improving, the industry has experienced a significant shift, and we’re waiting to see how things will change. So, as a fuel and lubricants supplier, we are here to help make it easier for you as a business owner to get the supplies you need for your shop. With our help, you can get the lubricants and automotive shop supplies you need. We can be the middle man for you with manufacturers, so you don’t have to waste time tracking down supplies to keep your shelves stocked for your customers. Call us today, and let us take care of your fuel and lubricant inventory.