LIQUI MOLY originated in Germany over 50 years ago. The company is one of the leaders where car oil, fuel treatment and fuel additives are concerned. The company is the foremost in UK markets and has even achieved 56% additional sales in the US markets. After setting an annual target of $490 million, the company has already reached sales of $249 million in just six months of the year. These figures are an addition of $41 million to what the company experienced in the same period in the past year. Earning too has remained on target despite the fact that procurement costs increased.
Though cost of crude oil prices depreciated in the second quarter of 2012, this had no effect on the cost of base oils and other raw materials which led to stable earnings for the company. The company on the other hand could no raise prices accordingly as they had to keep in mind prices of competition such as Shell, BP-Castrol and Exxon-Mobil.
In US markets, LIQUI MOLY works on its own subsidiary and does not corroborate with any independent importer. Sales increased 56% primarily due to better sales promotion, support from local garages, extended customer awareness schemes and the LIQUI MOLY racing team at the 24 Hours of Daytona.
Read the press release below for more information.
Auto News Release
LIQUI MOLY achieves 56 percent more sales in the USA
Semi-annual sales of the German motor oil manufacturer increased across the group by 19 percent
July 2012 – LIQUI MOLY continues on its path of growth. This is shown by the semi-annual figures of the German motor oil and additive specialists. Of the full year target of $490 million (€400 million), $249 million (€203 million) have already been “run in” from January to June. That amounts to a plus of $41 million (€33 million) in comparison to the same period of the previous year and an increase of 19 percent. In the United States sales even increased by 56 percent. Earnings also kept pace with increasing sales, despite increasing procurement costs.
While the price of crude oil dropped in the second quarter, this had no tangible effect on the costs of base oils and other raw materials. Base oils are already refined and provide the basis for the manufacture of lubricants such as motor oils. “Taking this under consideration, the stable earnings situation represents a special company achievement”, says LIQUI MOLY managing director Ernst Prost. The medium-sized company is not able to entirely pass on the higher procurement costs, as it must orient itself to the price policy of the competition. “Corporations like Shell, BP-Castrol and Exxon-Mobil achieve their earnings from oil production or at the gas pump”, Ernst Prost explains. The figures in the motor oil business do not play the same role as at LIQUI MOLY. Correspondingly, calculations are made differently there.
The rising raw material prices are a factor in the decision to advertize considerably less in Germany. A second factor is the strong market position LIQUI MOLY enjoys in Germany. Additional market shares can only be won with a great deal of effort. The third factor is the increasing importance of foreign business. In the meantime, LIQUI MOLY makes around half of its sales outside of its German domestic market. While domestic sales in the first half of the year increased by ten percent in comparison to the same period in the previous year, export sales increased by 28 percent.
The USA is one of the few countries in which LIQUI MOLY does not work together with an independent importer, but instead operates its own subsidiary company. The sales plus of 56 percent in the United States has several reasons. These include well-functioning sales promotions, large customer events, such as the LIQUI MOLY racing team at the 24-hour races in Daytona, and not least the personal support of garages.