According to a Business Standard report, the first eight months of the year have shown that sales of CNG passenger vehicles have increased by 46% year-on-year, far outpacing all other variants, including petrol, diesel and electric vehicles.
CS Vigneshwar, president of the Federation of Automobile Dealers’ Associations (FADA), is optimistic about the transition. India needs to reduce its dependence on imported fuel and meet corporate average fuel economy (CAFE) norms to reduce emissions.
He emphasized the diversity of fuel options now available on the market, including hybrids, pure electric vehicles (EVs), plug-in hybrids and CNG-powered vehicles. He believes this expansion of options is crucial for consumers and manufacturers.
“The growth of alternative fuels is really going to increase – CNG and also a number of other technologies,” Vigneshwar said. He also noted that as these technologies penetrate the market, there will inevitably be a decline in traditional gasoline and diesel vehicles.
Mumuksh Mandlesha, research analyst at Anand Rathi Institutional Equities, echoed Vigneshwar’s sentiments, particularly regarding the penetration of CNG in various vehicle segments. He noted that CNG is becoming the preferred fuel in India, not only in cars but also in commercial vehicles (CVs) and, increasingly, two-wheelers.
The government’s efforts to expand the CNG refueling network have been instrumental in this growth. “Today we have 7,000 touchpoints in India,” Mandlesha said, underlining the growing accessibility of CNG. He also noted that several automakers, including market leader Maruti Suzuki, have embraced CNG by offering the option in almost all models in their portfolio. This trend is not limited to Maruti as other prominent players like Tata Motors and Mahindra are also launching CNG variants of their popular models.
Vigneshwar mentioned that almost 15% of vehicles sold today are CNG-petrol hybrids, a significant increase from previous years. While Maruti Suzuki reports that a third of its sales come from CNG vehicles, its overall market share is around 15%. However, this is expected to grow as more manufacturers jump on the CNG bandwagon. Mandlesha added that Tata Motors has already achieved 12-15% CNG penetration across its domestic portfolio. Mahindra lags behind with lower penetration of around 5%, mainly due to lack of CNG options in its SUV lineup.
Transcript of discussion, lightly edited for style.
Q: Currently, from the passenger vehicle space, how much is coming from CNG vehicles, what kind of growth levels have we seen so far and what kind of growth levels do we expect in the future in this segment?
Vigneshwar: Currently, about 15% of the vehicles sold are CNG-Gasoline vehicles. When we look at it from a year-over-year growth standpoint, it’s probably up from almost 11% to about 15% right now, and that’s something that’s good to see that alternative fuels are also coming in and having an impact. in the market.
Q: I thought the number would be higher because I remember Maruti saying that almost a third of every car they sell is actually a CNG car.
Vigneshwar: There are very few brands that really deal with CNG. So when Maruti says one third, it means one third of the entire sales market share, so we need to keep that in mind. And that is where total sales of CNG vehicles reach approximately 15% market share.
However, now more and more manufacturers want to get on the CNG train.
Q: What is your opinion on this? Who are the players who are benefiting the most from the change we are seeing? Maruti is one. Are we also seeing more interest from other players?
Mandlesha: In India, we see CNG as the preferred fuel. We are seeing very good penetration in the automobile segment, we have seen it in the CV segment as well and now we are seeing it in the two-wheeler segment.
Indian consumers have seen how CNG works in India. And there is a big push from the government to boost the network in India. Today we have 7,000 touch points in India. And there are many more options available today. At Maruti we have almost all models with CNG option. We have products like Tata, Mahindra, etc. So there is a lot of focus and because of that, new launches are happening.
In fact, many automakers have abandoned diesel and switched to CNG as a fuel option. That is driving huge penetration of the CNG market in India. We believe this trend will also continue in the coming years.
Q: Maruti’s penetration for CNG is around 34%. But even peers like Mahindra and Tata Group have launched several CNG variants. Even for Tata’s popular Nexon, there is now a CNG variant. Do we have figures from Tata Motors or Mahindra in the domestic portfolio? What is the penetration of CNG?
Mandlesha: For Mahindra, it is still at the bottom because much of the SUV portfolio does not have as much CNG. But Tata Motors also has a double-digit penetration in terms of CNG, around 12-15%. Tata Motors also has a CNG option across its portfolio. There are some companies that do not have CNG models and that is why the total figure is 15% to 18% for the industry.
Q: For Mahindra, when you say low, are we talking about between 0% and 5%? Do we have any estimates?
Mandlesha: It’s around 5%, no more than that.
Q: What is the outlook for the future? Are we seeing more releases coming? Now we are also talking about two-wheeled vehicles in CNG variants. What kind of growth is the industry anticipating here? Do you think CNG will far surpass traditional fuels?
Vigneshwar: Thirty years ago, the desktop computer was the only computer we knew. And then a laptop came along, then a tablet, you also have your phones, which are really powerful computers these days. What I can tell you is that I am quite agnostic regarding this, I don’t know what is going to happen in the future because a lot of fuel is going to enter. We are going to have hybrids, we are going to have pure electric vehicles, we will have add-ons, we will have CNG-powered vehicles. So the reason I mentioned your personal computer, your desktop computer, is that many years ago, for many years we really only had diesel and gasoline, but today we have a wide variety of options and many of these options also depend on the type of application. is going to be used for. So, the growth of alternative fuels is really going to increase – CNG and also a number of other technologies – and of course, as these technologies continue to penetrate, there will be some losses in traditional diesel and gasoline vehicles. But I’m pretty excited because all of this has to happen. We need to reduce our foreign exchange leakage due to fuel imports. We also need to look at CAFE standards as an industry to make sure vehicles are much cleaner in terms of emissions.
So I’m pretty positive and enthusiastic about alternative fuels. CNG also leads the chart at the moment.
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