The new BP lubricant brand launched by Castrol India Ltd (CIL) last year has suffered a Rs 12-crore loss in the first year. The company launched the brand in July 2001, following the disinvestment of the Tata group from the Tata-BP joint venture.
CIL managing director Navin Kshatriya, while admitting the loss, said that the brand would break even in a year. He added that since the brand was a new one, it would take some time to achieve the breakeven. He said that the company had chalked out long-term plans for the brand and hoped that it would capture a ten percent market share within three to four years.
With the new brand, CIL has two brands in its portfolio - Castrol and BP. Castrol at present enjoys a 26 per cent share in the Indian lubricants market. BP was launched with the consumer proposition of ‘5.1 per cent diesel engine oil saving’ which has been well accepted in the market, Mr Kshatriya said. He said with the two brands under its arm, CIL would be able to offer more choice to customers.
Initially, Castrol’s share may be notched by the BP brand, but in the long run, the topline of the company would improve, he said. Castrol and BP would have distinct identities and would be able to meet a wider range of needs of its customers than with a single brand, and hence strengthen its market leadership position even further.
The company is focusing on tie-ups with original equipment manufacturers (OEMs) to understand the customer needs better. Mr Kshatriya said the lubricants market was expected to see a decline this year also.
Last year, the industry reported a six per cent decline. With two-wheelers figures rising, the market is expected to grow by another 20 percent by 2005. The company targets the two-wheeler market to improve its topline. CIL reported a net sales of Rs 1,357 crore last fiscal ended December 31, 2001.