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The global compressed natural gas (CNG) and liquefied petroleum gas (LPG) vehicle market registered sales of 46.0 million units in 2015, which is projected to reach 88.9 million units by 2022, growing at a CAGR of 10.1% during the forecast period (2016–2022).
Among all regions, Europe was the largest market for CNG and LPG vehicles, contributing nearly 40% share in 2015. It was followed by APAC, South America, Middle East & Africa (MEA), and North America. Whereas, the CNG and LPG vehicle market in APAC is expected to grow at the fastest rate during the forecast period.
Forces Governing CNG and LPG Vehicle Market
Key trend observed in the CNG and LPG vehicle market is the adoption of clean energy across the globe. Natural gas is the cleanest fossil fuel and consequently has emissions advantage over diesel and gasoline. Owing to the low emission properties of CNG and LPG, the environmental protection agency (EPA) has been able to set stricter emission mandates (particularly with NOx and atmospheric particulate matter reductions) that forced expensive diesel emission technology to be as environment-friendly as natural gas. Both CNG and LPG provide environmental advantages that are essential for vehicles to be certified to new demanding emission limits. The CNG and LPG vehicles, which are replacement of older and pollutant diesel vehicles, help in reducing pollution across the world.
The CNG and LPG vehicle market is growing, due to increasing government incentives to promote CNG and LPG vehicles. The Italian government and local authorities encourage the use of autogas through a mixture of policies, including favorable fuel taxes, incentives for clean vehicles, and traffic regulations. Autogas currently enjoys a substantial excise-tax advantage of 58 cents/liter over gasoline and 47 cents/liter over diesel. These differentials have increased considerably in recent years. The tax on autogas was cut in 2006 and 2007, and has increased modestly, while the tax on both diesel and gasoline has increased sharply, especially in 2012. As a result, price of autogas is around 40% less than that of gasoline in 2015 (compared with 50% in 2006) and around 44% less than that of diesel (compared with 55% in 2006). The increase in the price-competitiveness of autogas has coincided with the rapid turnaround in autogas fuel sales.
Structural Analysis of CNG and LPG Vehicle Market
Based on fuel type, the LPG category was larger contributor to the CNG and LPG vehicle market in 2015. Certain manufacturers, such as Maruti Suzuki India Ltd., have initiated manufacturing of LPG-equipped models, which is adding substantial impetus to the market size. On the other hand, the CNG category is expected to witness higher growth during the forecast period.
On the basis of vehicle type, passenger car was the largest category in the CNG and LPG vehicle market in 2015. This is majorly due to the significant share of passenger cars in total vehicle sales.
Global Scenario of CNG and LPG Vehicle Market
In 2015, Europe was the largest market for CNG and LPG vehicles. Countries such as Russia, Ukraine, Italy, and Germany majorly contribute to the European market, which is dominated by established OEMs, such as Volkswagen Group, Mercedes-Benz, The Volvo Group, and Mitsubishi Motors Corporation. Furthermore, the growth of the CNG and LPG vehicle market in the region is propelled by technological advancement in the automotive industry and increasing concern for carbon emissions. Stringent environmental regulations have impelled automobile manufacturers to focus on alternative fuel vehicles.
Competitive Landscape of CNG and LPG Vehicle Market
The global CNG and LPG vehicle market has been operated by several vehicle manufacturers, including Ford Motor Company, Suzuki Motor Corporation, Fiat Chrysler Automobiles N.V., Honda Motor Co., Ltd., General Motors Company, Groupe Renault, Daimler AG, AB Volvo, Toyota Motor Corporation, and Mitsubishi Motors Corporation.
Key Questions Addressed/Answered in the Report