Due to Increased fuel prices, urban car buys are demanding CNG-based models

27 Jun 2011 Evaluate

The increasing prices of petrol and diesel, has changed the market sentiments auto industry, now car buys are looking for new options and demand for non-traditional fuel cars like CNG (compressed natural gas). The CNG offers higher fuel efficiency and lower running cost compare to diesel and petrol cars, realizing the change in demand trend, carmakers are now introducing CNG based models.
According to Shashank Srivastava Maruti Suzuki India CGM (Marketing) "We were expecting this to happen, that's why our CNG-based models have been consistently doing well. But the recent demand has increased the waiting period for CNG models. The India’s largest car makers Maruti-Suzuki India has introduced five petrol cars, Alto, WagonR, Estilo and Eeco -with CNG-integrated injectors in last year to cater the demand for CNG based models in urban markets. Following the trend, other carmakers such as, Hyundai, General Motors, Toyota and Tata Motors has also introduced CNG variant of their popular cars, to tap the increasing demand for the cleanest and cheapest fuel, which is available only in Mumbai, Delhi, Agra and Gujarat.
Carmakers are changing their market strategies as the preference of urban car buyer are changing, Maruti-Suzuki is planning to extend the CNG technology to its other car models, General Motors India also planning to introduce CNG variant in its new cars like beat. Indeed, nation’s second largest carmakers Hyundai Motors India is facing tough competition in demand for its CNG model cars. "We have seen a revival in demand for the Accent CNG, which now has a waiting period, as customers are shifting to cheaper fuel options, said Hyundai director for marketing & sales Arvind Saxena
This change in preference of consumers is mainly because of cheaper running cost of CNG based models compare to higher running cost of petrol and diesel cars, and the recent hike in petrol and diesel, have increased the gap between CNG based models and petrol and diesel based models. In Delhi CNG cost around Rs 35.9 per liter, petrol cost around Rs 63.36 per liter and diesel cost around Rs 41.12 per liter. This cost difference is the main reason for increase in demand for CNG based models and for CNG itself. The sales of CNG-fitted cars in National Capital Region (NCR) have increase by 43%.
However, electric cars are also available such as Reva which have a running cost around 50 paise per km, but it is not popular due to huge battery cost and lack of charging option, beside this, limitations, buying price for electric cars are also high compare to other CNG and petrol based models. Although, CNG is available in few metros, auto industry analysis say the CNG has become popular and reliable in car users, because of this increased popularity Indian carmakers are lunching this technology in their popular car models.

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