Increasing acceptance of alternate fuel vehicles aiding the growth of the indian alternate fuel vehicles (LPG & CNG) kit market

13 December 2007

Spurred on by the growing acceptance of alternate fuel vehicles, the Indian alternate fuel vehicles kit market has seen a definite upswing in the last two years. Alternate fuel vehicles are overcoming the initial hindrances of low availability of fuel and are beginning to be widely accepted. The ability to convince and convert customers will offer vehicle manufacturers and kit manufacturers lucrative market opportunities.

A new analysis from Frost & Sullivan, Alternate Fuel Vehicles (LPG & CNG) Kit Market in India, finds that market earned revenues of over $82.7 million in 2006 and estimates this to reach $473.4 million in 2012.
 
"The market for alternate fuel vehicles in India is expected to grow at a significantly faster pace than the regular vehicles," notes Frost & Sullivan Program Manager Jose Paul. "Stringent emission norms, specific Government directives on use of alternate fuel vehicles and increasing availability of compressed natural gas (CNG) and liquid petroleum gas (LPG) will all drive the market rapidly."

Most key vehicle manufacturers are looking at launching alternate fuel vehicles in India over the next two to three years, and this has increased the acceptance levels of alternate fuel vehicles among end users. Furthermore, with petrol prices continuing to increase, many owners of existing petrol vehicles are also looking at converting their vehicles to run on alternate fuels.

However, the lack of widespread availability of alternate fuels in India is a barrier to the growth of alternate fuel vehicles. While the availability of CNG is currently limited to select centers in the west and north, the penetration of LPG dispensing stations has been concentrated on specific cities, with their network on highways remaining almost negligible.

"The expected ramp up of refuelling networks is expected to take time with the CNG pipeline project slated to be operational only by 2008-09," says Paul. "Moreover, the set of mother and daughter stations is likely to take an additional two to three years; similarly, it would take about five to six years to build up the number of LPG refueling stations across the country."

In order to increase their market presence, alternate fuel vehicle conversion kit manufacturers will need to focus on existing centers, where CNG and LPG are available. They will further need to aggressively market their products and also tie-up with vehicle manufacturers at the original equipment (OE) level and vehicle dealership levels.