The Hindu Business Line : Focus on CNG to push sales in luxury cars segment

While diesel has become the flavour for sales in the entry-level luxury segment, auto companies such as General Motors and Hindustan Motors are toying with the idea of introducing CNG as a fuel option in order to boost sales.

The companies have plans to introduce a CNG variant for the Optra and Lancer (old variant). The two variants will be introduced in CNG-centric areas including Mumbai, Delhi and Gujarat.

Cheapest Fuel

Various reasons make it a lucrative option, from the companies' point of view. Mr Ankush Arora, Vice-President, Marketing, GM India, said: "We opted for CNG primarily for its lower pricing and availability in the targeted areas". As of date, Mumbai has 120 CNG stations that is already supplying gas to 1,66,000 public transport vehicles, while Delhi has 146 stations adhering to over 1,06,000 vehicles. Moreover, at Rs 22.06 per kg it is the cheapest fuel available in the targeted areas.

Furthermore, with rise in fuel prices and registration costs especially in cities like Mumbai, ownership costs (maintenance costs + fuel costs) of such sedans in the luxury segment has become an expensive proposition. These companies have now also removed the only deterrent behind the introduction of CNG in their cars which is the warranty coverage. Unlike earlier, the companies are now willing to offer warranty on their models that are fitted with a CNG kit, which costs an additional Rs 50,000 approximately.

Though experts state that CNG conversion often leads to drop in performance of the cars, officials from the respective companies said that the cars are powerful enough to withstand the marginal drop. Sales are likely to be limited as introduction of the variants is restricted to certain markets only. Introduction of the variants in other cities will be carried out in a phased manner, depending upon the availability of CNG in these prospective areas.

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