Shell Lubricants India, part of the leading global lubricant supplier Shell, is rapidly transforming into an energy transition company. The company has a five percent market share in the Indian lubricants space, and to know about the approach it is adopting to cope with the changing dynamics of the automotive industry, Auto Tech Review caught up with Mansi Madan Tripathy, Country Head – Shell Lubricants India Cluster.
As the Country Head at Shell Lubricants India Cluster, Mansi Tripathy currently spearheads a team of 300-plus employees responsible for manufacturing, selling and marketing of lubricants to automotive and industrial customers across India, Bangladesh, Sri Lanka and Nepal, which combined, form the world’s third largest lubricants market. A seasoned business leader with over two decades of experience across diverse industries, Mansi had earlier served as Chief Marketing Officer – Shell Lubricants; Global Director at Gillette; Asia Pacific Head – Consumer & Market Knowledge at Procter & Gamble besides assuming various other roles across the Asia Pacific region. Mansi is a BTech in electronics and communication from the National Institute of Technology Kurukshetra, and holds an MBA degree in marketing from SP Jain Institute of Management & Research.
ATR _ What is Shell’s focus in the automotive industry that is witnessing massive transformations?
Mansi Madan Tripathy _ Shell is no longer an oil & gas company – it has transitioned itself into an energy-centric company, which clearly indicates our intent to move with the changing industry trends. Shell’s scenario planning unit looks at how the world will evolve over the next 35-50 years and subsequently focus on what should be the technology, product, capability platforms, etc. Based on these factors, you then come closer to the next few years, where interventions like BS VI and electromobility will come up.
Looking at the long term bigger picture, the company is focussing on more energy coming from gas and renewables. BS VI emission norms are not new for us as Shell has already been working with OEMs in Europe and the US. Shell has the knowhow of BS VI products and our technology has been tested across markets. Shell has been working with DICV for their entire BS VI engine technology scheduled for 2022. We are also engaging with various OEMs depending on their technology roadmaps. Our strengths lie in collaborating across the ecosystem – be it with OEMs or academia. Shell is forging partnerships to bring the best solutions in India. We have formed an academic partnership with Munjal University as well as various partnerships with OEMs.
Give us your perspective about Shell’s collaboration with OEMs, as the auto industry migrates to BS VI by April 1, 2020?
From the lubricants perspective, the big piece is the base oil and additives. And Shell has both in sufficient quantity. Shell is switching its current portfolio to meet BS VI emission norms given the technology roadmaps of OEMs. Our production from the lubricants point of view is fairly well covered. Expansions as such are not required as BS VI is backward integrated and Shell will be typically swapping its product range once the technology kicks in.
We have technology centres in Hamburg, Shanghai and Bengaluru that carry out a lot of our technology development work. We need to ensure such developments are made according to Indian conditions, OEMs and country specifications.
OEMs focus on different areas as per their technological roadmaps – some focus on increasing the oil drain interval, while there are others that focus on fuel efficiency and lesser carbon emissions. Depending on such requirements, Shell collaboratively works with OEMs to further tweak its base technology so that it is in line with the hardware and software of OEMs. Typically, Shell follows the co-engineering process and subsequently relies on millions of tests to know the outcome needed and how it needs to blend the oil.
I believe most OEMs in India have embraced the fact that they have to adapt to stricter emission norms and create more sustainable solutions to play a larger role in the ecosystem of promoting ecological balance. BS VI actually offers a good balance to reduce CO2 footprint though technological improvements. For electric vehicles, most companies are seeing it as an incremental revenue generation with new models. There are investments they need to make. If any technology helps them to be much more sustainable, I think it will bring in positive effects.
Do you think synthetic oils can give a tough run to mineral oils that dominate the Indian market?
At an aggregate level, synthetic lubricants are still around 7-9 % of the total market, steadily growing from the 5 % market it held 18 months back. The rest of the market is mineral oils. Synthetic oils hold 22 % market share in the motorcycle segment, while it enjoys around 28 % market share in the passenger car segment. In the B2B side, the synthetic oil penetration is still low for applications like wind and power but they are steadily picking up.
It is crucial that you understand the value of synthetic oil, which is significantly higher than the absolute product cost. Once that equation gets cleared in the minds of consumers, the switch will happen easily. Even if the fuel economy increases by 3 km/l, premium pricing of synthetic oils won’t hurt much. The onus is on us to explain to the consumer about the total cost of ownership, and not just the initial costs. Globally, the synthetic oil penetration is high in countries like Russia (55-60 %) and China (30 %). I believe India has a long way to go and we see it as an opportunity, where the market can potentially keep growing.
Give us a perspective about the Gas-to-Liquid technology and its benefits at the ground level?
GTL is our proprietary technology and we’ve invested around $ 1 bn on R&D globally. It is about converting gas into base oil. Shell has seen benefits wherever it has leveraged GTL in its synthetic oil range, in terms of high cleanliness index on base oils. Our focus is to offer our product range at a price range, where consumers are able to take that premium, and reap all the benefits from the technology. Differentiation gets difficult in lubricants space, where all players are buying the same base oil. But if we have the base oil that no one else has, then it does give us a competitive advantage. Shell has proved it to OEMs like Tata Motors, when we launched the Shell Rimula T 5, where we were getting 9-13 % fuel economy and lower carbon emissions, which I feel is huge.
Can you throw an insight into Shell’s R&D operations in India?
Shell’s R&D facility in Bengaluru caters to the lubricants segment and also serves as the backend centre of its global R&D activities. There are two parts to it – one is analytical, where once you feed in different forms of formulations, it is able to give you analytically the best optimised solutions. Secondly, there is an actual lab, where Shell can test the engines to check the compatibility and see what needs to be done there.
How is Shell channelising its investments for the future of mobility?
Shell is investing a lot on people, skill development and infrastructure upgradation besides investing in digitisation. The objective is to seamlessly connect to the entire supply chain (starting from raw material to the product that gets sold). Investments are also being made in management information systems (MIS) that are currently on different platforms. Our focus is to integrate them so that it helps us take real time decisions.
Shell is investing a lot on leveraging artificial intelligence and has already developed a chatbot named Shelly. This chatbot is an AI-enabled agent that can be a one-stop solution to answer any queries of people, who just don’t know anything about lubricants. We started off with a data bank of 20,000 questions and are now approaching 50,000 questions. Technically, it has not cut any jobs; rather it has created more jobs as it requires 15 people feeding information and filtering out redundant information. It is an integrated system and the information can flow from anywhere. So, Shelly is learning along and becoming intelligent every day.
There are also future technologies like Machinemax, where you can listen to voice of the machine to understand if there are any frictions coming up and solve them. Shell is making lots of other investments that are in line with our core needs to satisfy and reduce friction, which is the role of a lubricant. We are also trying to look at not just products but services or digitally-enabled solutions. These new innovations will comprise 20-30 % of our future revenue streams.
What’s your take on the electromobility scenario in India?
Electromobility is here to stay and India will remain bullish on EVs. Shell will be actively participating in that change keeping consumers in mind. For us, we are not just in the lubes business, but also offer frictionless solutions. Further, we could provide solutions like digitally-enabled dashboards, while you are driving, to share real time information to the drivers. As the buying power of people increases, the EV potential across Tier 2 & 3 cities will be immense. I believe these cities are rapidly innovating with their transportation solutions. For instance, one can witness a slew of e-rickshaws available in Tier 2 & 3 cities that are not available in Tier one cities, which is an encouraging sign. People across Tier 2 & 3 cities just need to be taught to adopt EVs the right way. Even in different scenarios, the EV trend will increase and will co-exist with ICEs at the same time.
TEXT: Anirudh Raheja