A Different Landscape, More Learning Opportunities
Being set apart as a business is more important than ever before, but does the horizon of the fast lube industry look the same throughout the world?
Waheed Shaikh, vice chairman and executive director of Petromin Express on the Arabian Peninsula, gave us a glimpse of the fast lube industry on the other side of the world.
“While 90 percent of oil changes in the consumer automotive market in Saudi Arabia are do-it-for-me, only 5 percent of the market is occupied by express lubes,” Shaikh said.
Yes, you read that right, only 5 percent. Quick lubes entered the marketplace roughly 10 years ago in Saudi Arabia. By 2007, the number of quick lubes had grown to around 30 to 35 locations. After a merger with the Petromin Corporation, the locations, then named Gulf Express, were re-named Petromin Express.
“Petromin Express is now the eighth largest quick lube network in the world. The first seven are in the U.S.,” Shaikh said.
Today, the same quick lube concept that started with one shop has grown to 200 fast lubes and continues to increase.
“Currently Petromin Express is opening, on average, one location per week with hopes of having 500 stores open by the year 2020,” Shaikh said.
They are still the only corporation-owned fast lube in Saudi Arabia.
“Currently, with the exception of Petromin Express stores, the only alternatives for vehicle owners are independently run shops and dealerships,” Shaikh said.
Before, consumers had only two options for an oil change.
“Car owners had the choice to visit a dealership or an independent oil change,” Shaikh said. “Petromin Express is in between these two segments. We cater to a market that is primarily owners of newer vehicles. These customers don’t want to go to a dealership, but still want a professional oil change.”
Petromin Express offers gold and silver options to customers who want a basic four-liter oil change without filters. The gold oil change is priced around the equivalent of $25 while the silver is priced at $20.
Saudi Arabia’s growing economy has been a major factor in Petromin Express’ success in the automotive aftermarket.
“While drain intervals are increasing, the number of cars on the road in Saudi Arabia is also growing at a rate of 10-15 percent each year. This is minimizing the impact of longer drain intervals on business in our shops,” Shaikh said. “We are on a steady growth curve month-to-month.”
Car counts in Saudi Arabia are increasing because more drivers are moving from mom-and-pop shops to professional automotive service locations. Car counts across the Petromin Express network average around 20 per day, according to Shaikh. Ticket averages land around the equivalent of $50.
“Our segment in the industry is growing because we are putting in more outlets, but also because many customers are beginning to prefer the experience of going to a professional, corporate quick lube like Petromin Express,” Shaikh said.
New legislation from the Saudi Arabian commerce administration is encouraging customers to drive into the bays of professional quick lubes.