With fuel prices hovering around $135 a barrel, the demand for LPG and CNG kits for automobiles is expected to go up by over 60-70% in the next few years as people gradually wake up to the need of cheaper and cleaner fuels.
The Delhi-based Minda Auto Gas, the supplier of LPG kits to Maruti?s Wagon R Duo and CNG kits to Hyundai Santro, has registered a growth of 50% in 2007-08 with the company selling over 50,000 kits in the last fiscal, says NK Minda, managing director, Minda Auto Gas.
?Availability of cars with alternate fuels are fast gaining popularity and this is expected to propel the demand for conversion kits by over 60-70% over the next two-three years,? says an expert.
Interestingly, the growth will not be restricted to the sales of LPG/CNG kits to original equipment manufacturers (OEMs) that come out with factory-fitted fuel conversion systems. Even the after-sales retrofitting market is expected to witness a growth of 10-12%. Though the growth rate is small, but considering the fact that the after-sales retrofitting market is about 20 times larger than the OEM market for conversion kits, the number is huge.
According to industry estimates, in three years time over 10% of the total vehicles in the personal segment will be LNG/CNG-fitted and the number is expected to go up to 15%. Though this comes at a cost which is Rs 30,000 to Rs 40,000 higher, the fact that people actually end up reducing the running cost of their vehicles by 40% is boosting demand for conversion kits.
?The manner in which oil prices are going up, people will be forced to sit back and think of alternate fuels as it not only helps them to save their expenditure but also helps to make the environment more cleaner,? says Abdul Majeed, auto analyst and partner Price Waterhouse.