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The present recovery phase of the commercial vehicles industry appears to have a tinge of ‘green flavour’ with a surge in sales of CNG (compressed natural gas)-powered trucks.
Demand for CNG-powered trucks is on the rise in the past two quarters due to improved availability of CNG and lower cost of operations.
For Tata Motors, India’s top commercial vehicle company, CNG models make up 40-50 per cent of ICVs (intermediate commercial vehicles) /LCVs (light commercial vehicles) and 15 per cent of SCVs (small commercial vehicles), driven by better availability of CNG and higher petrol/diesel prices.
VE Commercial Vehicles, third largest medium & heavy-duty commercial vehicle company, has indicated that CNG models were doing well in its light and medium duty truck portfolio, where it has witnessed about 50 per cent swing in favour of CNG from diesel.
“In the new commercial vehicle sales one particular differentiating item what we have witnessed this time is the demand for CNG vehicles. The CNG vehicle sales have been constant at about 25,000 units a year in the past three years. But in the past six months, of this year, CNG vehicle sales rose to 31,529 units. That means significantly the new vehicle sales is moving towards CNG, and especially in the corridor where CNG is available. After Delhi, CNG availability is reasonably good in the Mumbai-Delhi corridor, says Umesh Revankar, Vice Chairman & Managing Director, Shriram Transport Finance Company Ltd.
Cost is key
Since the cost of CNG is about half the price of diesel, truckers see about a 50 per cent reduction in their operational cost. Sensing good benefits and profitability, scores of truck owners are also fitting CNG kits in their existing vehicles.
Right now, the CNG availability is good in the corridor of Ahmedabad to Delhi. In the last couple of months, there has been new CNG availability in Baroda to Mumbai. Therefore, the Mumbai to Delhi corridor CNG is available at a shorter distance. Similarly, it is now available till Kanpur in UP and number of CNG stations are being ramped up in Mumbai-Bengaluru corridor, adds Revankar.
Promoting CNG
Not just in India, but globally commercial trucks have been described as a major source of emissions and the efforts to make the segment more environment-friendly didn’t see much progress particularly in India, which is one of the largest CV markets in the world with a very high number of polluting trucks.
Though the Indian government has made some beginning with the announcement of scrappage policy, there have been big efforts to push CNG-powered vehicles as a viable alternative to diesel-powered ones as electrification may take more years in the country.
The efforts to promote CNG with ramp up in number of CNG outlets across the country have paid dividends more and more people gain confidence to buy CNG-powered vehicles.
Industry representatives say that truckers would gradually move towards CNG or even LNG (as the latter is more efficient than CNG) as far as the goods carrying is concerned. With LNG, trucks can carry double the size. But LNG availability needs to improve. Overall, the next 2 or 3 years will see a huge shift (including retrofitments) towards CNG or LNG.
“When the freight rate is fixed at diesel price, smart operators use CNG vehicles (or retrofit CNG kits) and make more profits,” says Revankar.
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