The Hindu Business Line : LPG/CNG kit makers hope to cash in on high petro prices

With fuel prices flirting with $100 a barrel, the number of car users switching over to cheaper fuel options is set to rise, say kit makers and car dealers catering to this market.

The Delhi-based Minda Auto Gas, the sole supplier of LPG kits to Maruti’s Wagon R Duo and CNG kits to Hyundai Motors’ Santro, has crossed the 30,000-mark by the first half of the current fiscal. The company had sold 40,867 LPG/CNG kits last financial year.

“The economic viability, the growing environmental concern and vast availability of LPG will propel the conversion kit market. In four years’ time, 10 per cent of the total vehicles in the personal segment will be LNG/CNG-fitted,” said Mr N.K. Minda, Managing Director of Minda Auto Gas.

As the sales of LPG/CNG kits to original equipment manufacturers (OEMs) that come out with factory-fitted fuel conversion systems grow by about 50 per cent, the much larger after-sales retrofitting market is also rising. The after-sales retrofitting market in the personal segment is growing by 10 per cent every year, according to Mr Arun Badia, CEO of Auto Gas India. The company, which imports the Italian CNG/LPG kit Lovato, sold more than 50,000 conversion kits last year.

“The after-sales retrofitting market is about 20 times larger than the OEM market for conversion kits. There are more than 20 players in the retrofitting business. Most of the fitments, about 70 per cent, are done in small cars,” he said.

It is not just owners of small cars, taxis and autorickshaws, who favour the CNG/LPG vehicles but even those opting for premium sedans that would have little cause to worry about high petrol prices. Chevrolet Optra, Mitsubishi Lancer, Ford Ikon, Indigo Marina are some of the other vehicles where dealers offer conversion kits.

The LPG/CNG kit market is highly optimistic that the spiralling fuel price coupled with the quest for clean energy would translate into more retrofitting business.

The major market players of the fledgling conversion kit market hope for tax incentives to reduce the cost of retrofitting and the expansion of the network of CNG/LPG filling stations as the Government, for economic and ecological reasons, wants more vehicle owners to opt for alternative fuels.

“Every month we have 25 to 30 buyers who opt for retrofitting and the number is going up. The upward trend is here to stay since fuel conversion ensures at least 40 per cent reductions in the fuel spending. But only those who are pretty sure about their long rides are ready for an initial cost of Rs 25,000 for retrofitting,” said Mr Kamal Chawla, Sales Manager of Sai Service, Mumbai.

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