Price sets CNG,LPG biz afire

Font Size

Print

Feedback

Email

Discuss

Related Articles

Honda’s new zero-emission, hydrogen fuel cell car ...

Mumbai, June 17: Within days of the announcement of the hike in oil prices, original equipment manufacturers (OEMs) are busy introducing CNG and LPG variants of their existing models. The hike has come as a boon for conversion kit manufacturers and fitters in India. “We expect 50% growth in our revenues this year,” said NK Minda, chairman and managing director, Minda Group. Minda Autogas, a group company of Minda Group, provides CNG and LPG kits to OEMs like Maruti Suzuki and Hyundai. The company sold 50,000 CNG and LPG kits in 2007 and plans to foray into the after-sales retrofitting market, which is witnessing a 10% year-on-year growth, citing the huge demand.

“Independent dealers into retrofitting are already running out of stock . We expect a slight increase in the prices of CNG and LPG kits in short term,” said Pinaki Mukherjee, lead analyst, Datamonitor India. The spur in demand for CNG and LPG cars is mainly due to relatively low prices as compared to petrol and diesel. In addition, the drop in CNG prices last month has also fueled the demand for such cars. Also, the running cost of CNG fitted cars is lower than gasoline fitted vehicles, explains Mukherjee, adding that banks are not only financing CNG and LPG vehicles but also opening up to financing retrofitting of CNG and LPG kits. There are over 3,54,000 CNG vehicles in India and majority of these vehicles are located in Mumbai and Delhi. However, there has been growing demand for these vehicles in Tier-II cities like Vijayawada, Vadodara, Agartala, Kanpur, Bareli and Lucknow.

“We expect OEMs to witness 50%-60% sale in terms of new sold CNG and LPG vehicles,” said Mukherjee. Contrary to this, P Balendran, director and vice-president corporate affairs, General Motors India said, “Industry is witnessing a sluggish growth and the volumes will be low. The decision of the government to further increase in excise duty has come when the industry is struggling with high oil prices, input costs and financing crunch.”

GM already has its Optra available in CNG variant and is considering other models too, Balendran added. Maruti Suzuki and Hyundai are also providing CNG variants of their most preferred car brands. Hyundai has recently introduced the CNG variant of its mid-size sedan Accent. Tata Motors launched an LPG version of its Indica Xeta recently. While more manufactures are expected to follow suit.