A new report from Frost & Sullivan forecasts that sales of Liquefied Petroleum Gas/Compressed Natural Gas vehicles and conversion kits will increase 175% from 2.9 million units in 2006 to 8.0 million units by 2012.
The global automotive industry is making emission reduction a top priority and this is leading to increased development of LPG/CNG as alternative fuels and associated conversion kits. With the provision of appropriate infrastructure and strong support from governments and fuel suppliers, LPG/CNG will gain greater acceptance as alternative fuels across the globe.—Frost & Sullivan Research Analysts
India and Pakistan have enforced mandatory conversion to alternative fuels for all public transport in certain local regions. Both these countries as well as Iran are expected to record the highest growth in LPG/CNG sales. Latin American countries are also moving toward large-scale utilization of CNG vehicles with Argentina and Brazil being the largest consumers of CNG kits in the world.
LPG kits will continue to dominate the market mainly in the EU, Russia and Turkey. India and Iran accounted for 20% of global sales of CNG kits in 2006, and this is likely to increase to more than 42% by 2012.
While aftermarket sales of LPG/CNG kits currently hold more than 85% of total global kit sales, original equipment manufacturer (OEM) kit sales will steadily increase to reach more than 27% of the total number of units sold by 2012.
Competition from other alternative fuels, such as ethanol and biofuels, could challenge the growth of the LPG and CNG markets. The lack of appropriate infrastructure for the distribution and refuelling of these fuels and low levels of customer awareness about the benefits of alternative fuels are other factors hindering market development.