Toyota Kirloskar Motor on Wednesday announced its foray into the CNG segment, by launching CNG variants of the Glanza and the Urban Cruiser Hyryder. It became the fourth carmaker (after Maruti Suzuki, Hyundai and Tata) to offer CNG cars. In the mass-market segment (cars priced under Rs 15 lakh), there are now 15 CNG car models in India, as compared to 14 diesel car models.
Previously, on October 31, Maruti Suzuki had launched the Baleno and the XL6 in CNG, taking the total number of the company’s CNG models to 12. These include nine passenger cars (Alto, S-Presso, Celerio, Wagon R, Swift, Baleno, Dzire, Ertiga and XL6), one van (Eeco), one model for fleet customers (Tour S) and one commercial vehicle (Super Carry). Among passenger cars, five of the nine were offered in diesel — Celerio, Swift, Baleno, Dzire and Ertiga — prior to the implementation of the Bharat Stage 6 emission norms on April 1, 2020. The carmaker is also expected to launch the Brezza (a diesel-only SUV prior to April 1, 2020) in a CNG fuel option soon.
Earlier this year, Tata Motors launched the Tiago and the Tigor in CNG — both were previously offered in diesel.
Hyundai sells the Grand i10 NIOS and the Aura in CNG — the Grand i10 NIOS was earlier available in diesel.
Automotive analysts told FE that despite rising prices of CNG — these have risen 51% in one year, from Rs 52.04 per kg to `78.61 per kg — it offers the lowest running costs among conventional fuels and that’s why CNG cars are in good demand, making carmakers turn to this fuel to replace their diesel portfolio.
Saket Mehra, partner, Grant Thornton Bharat, said CNG cars are the most economical to run as these have a fuel efficiency improvement of about 30% over petrol and have a far lower maintenance cost over diesel. Carmakers also know that elevated CNG prices may be a temporary phenomenon — due to the spike in international prices of natural gas triggered by the Russia-Ukraine war.
“As far as product development is concerned, we plan years in advance,” Shashank Srivastava, senior executive director, marketing & sales, Maruti Suzuki India, told FE. “Geopolitical factors usually have a temporary impact.” He added that despite the recent spike in gas prices and the higher sticker price of CNG cars vis-à-vis petrol cars, the total cost of operation of a CNG car is lower than petrol and diesel.
CNG was earlier associated only with entry-level cars, the owners of which are very sensitive to high running costs. But with Maruti Suzuki launching premium cars like the Baleno and the XL6 in CNG, and Toyota launching the Glanza and the Urban Cruiser Hyryder in CNG, that doesn’t appear to be the case anymore.
“Be it buyers of entry-level cars or those of more premium cars (in the Rs 10-15 lakh segment), all are sensitive to operational costs,” said Som Kapoor, EY India Automotive, Future of Mobility leader (consulting), and partner. “It’s not that owners of expensive cars don’t want to save on fuel costs. A lot of them already go in for aftermarket retrofitting of CNG kits. Carmakers know this, and are now offering buyers better and safer products than what they would get in the aftermarket.”
While there is no structured data on how many cars are turned to CNG in the aftermarket — because a lot of the work happens in the unorganised space — the rising demand for CNG cars can be gauged from the fact that, in August, the ministry of road transport & highways issued a notification allowing retrofitting of CNG and LPG kits on BS6 gasoline vehicles and replacement of diesel engines with CNG/LPG engines in vehicles less than 3.5 tonne in weight. Earlier, aftermarket retrofitting was allowed only in BS4 vehicles.
Mehra added that instead of rising CNG fuel cost, a bigger question in the minds of users possibly was availability of gas. “But now with the increasing number of CNG stations (4,500 in 2022 and expected to touch 10,000 by 2030), availability is less of a concern,” he said.