Cng And Lpg Vehicle Market Size, Share & Industry Analysis, By Type ( CNG, LPG ), By Vehicle Type ( Passenger Cars, Commercial Vehicles ) and regional forecast 2023-2030

Government institutions worldwide have been strident for adopting cleaner automobiles to reduce the environmental impact of road traffic for decades. Many countries and cities have passed regulations to improve fuel efficiency (hence lowering CO2) and limiting air pollution.

Previously, smaller automobiles were the focus of fuel economy efforts. However, similar concepts are increasingly being applied to commercial and heavy-duty vehicles, resulting in the use of LPG and CNG in these vehicles. Natural gas-fueled vehicles emit 15% less pollution than diesel trucks, according to a recent study conducted by the Sustainable Gas Institute in 2019. However, the volume of these commercial vehicles is still relatively small, accounting for only around 1% of the total global volume.

The operating expenses of CNG and LPG vehicles are significantly lower than those of petroleum vehicles. Alternative fuels, such as LPG and CNG, are more cost-effective, especially for frequent drivers. CNG vehicles have a travel range of approximately 21 kilometers per kg of fuel, diesel vehicles similarly have 17 km per kg, and gasoline vehicles can travel approximately 15 km per liter. As a result, CNG and LPG vehicles offer more range at a lesser cost, reducing vehicle operating costs. Hence, affordability will positively influence the growth of the market.

Moreover, the growing inclination toward electric/fuel cell vehicles is expected to restrain the uptake of these vehicles during the forecast period. One such issue that can result in excessive cylinder damage is improper drainage. The shield systems must be able to drain particles and liquids away from the cylinder, according to NPFA 52. This entails drilling holes at regular intervals.

Impact of COVID-19 on the Global CNG and LPG Vehicles Market

The pandemic brought the entire mobility ecosystem to a standstill, disrupting the production and sale of new vehicles worldwide. Even after production resumed, operating capacity was considerably lower, and the unexpected rebound in demand caused a shortage of raw materials and components such as semiconductors. As a result, automakers had to modify their manufacturing capacities. The automotive sector is a high-capital-intensive industry that requires periodic funding to stay afloat. As a result, the production halt and lower demand during the outbreak had a negative impact on CNG and LPG vehicle adoption.

Although conditions improved in recent months, most manufacturers reported fewer CNG and LPG vehicle sales in 2020.

• For example, Honda's sales plummeted by more than 15% in the third quarter of 2020, while operating profit fell roughly by 13% for the entire year. Japanese automakers' combined annual sales plummeted by approximately 7.3%. Volkswagen's sales dropped in the first several quarters but rebounded by the fourth quarter of 2020. The company saw a drop in CNG and LPG vehicle sales during the pandemic as clients began to switch to electric vehicles.

Key Insights

The report will cover the following key insights:

• Key Industry Developments – Mergers, Acquisitions, and Partnerships


• Porter’s Five Forces Analysis


• PEST Analysis


• Technological Developments


• Impact of COVID-19 on the Global CNG and LPG Vehicles Market

Analysis by Sales Channel 

Compared to aftermarket conversions, OEM/factory-fitted CNG and LPG vehicles are selling at a substantially lower rate. This is attributed to the fact that a factory-fitted CNG or LPG car costs significantly more than the cost of a petrol variation of the same vehicle with an aftermarket CNG or LPG kit installed. With increased economies of scale, the price disparity may narrow over time. This could result in a decrease in the cost of company-owned vehicles.

OEM-fitted automobiles also have some advantages, including vehicle customization (for top vehicle models) and a guarantee that comes with the vehicle when purchased. These are two of the main reasons for their growing popularity. Some local-part suppliers may have a warranty or cylinder-related issues if noncertified. Hence, the OEM segment will exhibit promising growth during the forecast period.

Analysis by Vehicle Type 

Global air quality is deteriorating due to excessive emission of pollutants and greenhouse gases caused due to the combustion of fuels such as gasoline, coal, and diesel. Consumers in China, India, and South Korea are more motivated to use alternative fuel sources and related technologies due to the worsening environment and air quality. Natural gases, such as CNG and LPG, are also cost-effective due to their superior fuel economy.

According to NGV Journal data, CNG is around 50% more cost-effective than gasoline and approximately 40% more cost-effective than diesel. This is one of the critical factors for consumers to switch to CNG.

Regional Analysis

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Asia Pacific is the world's largest CNG and LPG vehicles market; China, India, South Korea, and Thailand account for most vehicle sales. China exhibits the largest market share owing to government initiatives encouraging the adoption of low-emission fuel vehicles and the low cost of vehicle modifications. India is the second-largest market for CNG and LPG vehicles in the region and the fastest-growing. This is due to the country's high petrol tariffs, which surge the demand for alternative fuel cars. In addition to reducing the cost of aftermarket conversion in the country, the government's new vehicle scrappage rules would dramatically increase the number of CNG vehicles.

Attributed to government assistance and strict emission standards, South Korea and Thailand are important markets for CNG and LPG vehicles. Emission standards are becoming more rigorous in Japan and Indonesia, offering potential opportunities for market expansion. Thailand and Japan are among the region's fastest-growing markets, owing to the increased use of CNG and LPG bi-fuel and dual-fuel cars and government support for emissions reduction.

Key Players Covered

• TATA Motors (India)


• Suzuki Motor Corporation (Japan)


• Honda Motor Company (Japan)


• Hyundai Motor Group (South Korea)


• Volkswagen AG (Germany)


• Ford Motor Company (U.S.)


• MAN SE (Germany)


• IVECO SpA (Italy)


• Ford Motor Co. (U.S.)


• General Motors Co. (U.S.)

Aftermarket Kit Manufacturers

• Landi Renzo S.P.A


• Tartarini Auto S.R.L.


• Tomasetto Achille SpA


• Westport Fuel Systems Inc.

Segmentation

Key Industry Developments

• In April 2022, according to a senior business executive, the country's largest carmaker, Maruti Suzuki India (MSI), aims to sell 4-6 lakh CNG units in the current fiscal year, depending on the supply status of crucial components. In 2021-22, the company sold roughly 2.3 lakh CNG units. MSI sells 9 of its 15 models with a CNG powertrain and plans to introduce more models with the technology soon.


• In March 2022, Maruti Suzuki India (MSI) introduced Dzire, a compact sedan incorporating S-CNG technology. Dzire S-CNG has a 1.2-liter petrol engine that produces 57kW of peak output and 31.12 km/kg of mileage. An intelligent injection is standard on S-CNG vehicles. Vehicles are tweaked and calibrated to provide optimal performance and drivability on various terrains.


• In February 2022, Ashok Leyland, the flagship company of the Hinduja Group, plans to open a new manufacturing facility in the country to produce electric vehicles. The Chennai-based company has set aside funds to develop powertrains for its commercial vehicle range based on alternative fuels such as CNG, hydrogen, and electricity.


• In March 2021, Fiat Chrysler Automobiles introduced the Ram 1500, which has a 428-horsepower V8 engine and runs on Compressed Natural Gas (CNG) to meet Europe's strict emission regulations.