Auto industry experts suppose that the recent drop in compressed natural gas (CNG) fuel prices in India would stimulate demand for CNG-powered passenger cars, whose sales were previously hampered by the ongoing rise in domestic fuel prices.
In the fiscal year 2024, up from 325,000 in the fiscal year 2023, Shashank Srivastava, Senior Executive Officer of Sales and Marketing at Maruti Suzuki India, the firm that sells seven out of every ten CNG automobiles in the nation, anticipates selling between 450,000 and 475,000 CNG models.
According to Srivastava, the price reduction will further boost consumer preference for CNG vehicles over diesel and petrol alternatives. Demand for CNG models has already been high. Adopting the most recent emission regulations has increased the price of diesel automobiles. In addition, the price advantage diesel fuel enjoyed over petrol has been reduced, making CNG a more alluring option for customers.
Since the government changed the methodology for determining domestic gas rates last week, Indraprastha Gas, India's largest city gas distribution business, has reduced the price of CNG by 6 rupees per kilogramme. The corporation has now reduced prices for the first time in two years. When the calorific value is considered, CNG offers a benefit of about 30% over petrol, making it a desirable fuel choice. Despite costing 80,000–90,000 more than their petrol-powered equivalents, CNG variants of automobiles are projected to see an increase in demand due to the recent price reduction.
Similar expectations have also been made by Hyundai Motor India, the nation's second-largest passenger vehicle manufacturer by sales. The cost of owning a diesel vehicle has grown due to the most recent pollution requirements, making CNG an even more intriguing alternative. The payback period for consumers of CNG vehicles is shortened by the current inexpensive advantage of CNG over petrol.
Hyundai Motor India's Chief Operating Officer Tarun Garg stated that the company anticipates a 10-15% increase in CNG model sales as well as a progressive increase in monthly average sales from 5,000 to 6,200 units in the calendar year 2022 to 6,000 units in 2023 as a result of the recent drop in the price of CNG.
Sales of Hyundai's CNG models increased, going from 37,584 to 63,058 units in 2022. However, due to restrictions on the supply, the volumes could not have been higher. Hyundai recently announced that it would stop offering diesel engines in sedans and compact cars and only continue providing them in SUVs.
Garg, the COO of Hyundai Motor India, was asked whether the company would focus more on CNG models without diesel engines in sedans and compact cars. In response, Garg stated that a single solution could not be applied to all segments. He explained that for performance models such as the Verna, petrol turbo engines are the best option in addition to petrol. On the other hand, for Aura, which relies on CNG for 74% of its sales, CNG is the more practical choice.
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