Mobil oil: Defending market leadership in synthetic lubricants in China

China's lubricant market was dominated by PetroChina and Sinopec. Foreign brands together controlled about 25% of the market, and these brands offered the higher-grade lubricants. Most vehicle lubricants used in China were low-grade lubricants. However, this was expected to change. Continued economic growth and rising incomes had led to increased demand for cars. New models and luxury cars would likely stimulate demand for higher-grade lubricants. The case focused on synth etic lubricants of which Mobil was the market leader. Mobil's leadership position here was being threatened. Local brands were gradually improving in quality and a few have secured rights to supply joint venture car manufacturers. Armed with deep pockets, their aggressive advertising had helped their brands gain prominence. The case required some recommendations on how Mobil should respond.