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  • jingjohk11 jingjohk11 May 27, 2013 8:27 PM Flag

    80% fall in CNG car demand (India)

    Monday, May 27, 2013, 12:23 IST | Place: Ahmedabad
    As gas & petrol price difference narrows down to just over Rs 2.
    Till May 2012, Maruti and Hyundai were selling about 1,500 CNG cars in the state every month. At the same time, CNG kit dealers were converting about 6,000-odd cars every month. Both have witnessed a drastic fall of over 80% in demand for CNG cars in the last one year as the price of fuel has increased by 27 per cent or Rs13.60 per kg. 

Now, Hyundai and Maruti together are selling about 300-odd CNG cars while the CNG kit dealers are converting hardly 200-odd cars every month. Till the first week of May 2012, the difference between the price of CNG and petrol was about Rs20. 

At that time, the price of CNG was Rs50.20 per kg and petrol Rs70 per litre. Now, after a recent cut in petrol price and hike in CNG price, the difference has come down to less than Rs2.

At present, CNG is sold for Rs63.80 per kg and petrol Rs65.72 per litre in Ahmedabad. 
Experts believe that even the gap between the mileage cars in value terms of CNG and petrol has narrowed down. Earlier, the mileage of CNG cars was valued around Rs2 to Rs2.50 per km which increased to more than Rs3.50 to Rs4 per km. In case of petrol, it used to be around Rs6 per km which came down by more than Re1. 

“Gujarat has the best CNG network and grid. The state used to be one of the largest CNG car buyers. But the continuous hike in CNG price and reduction in petrol price have affected the demand for CNG cars in Gujarat. Till last year, Maruti Suzuki was selling about 1,000 CNG cars per month which is now reduced to around 200 only,” said Maruti regional manager Vishal Sharma. 

According to Sharma, customers have realised that by installing CNG kit or buying CNG cars by spending about Rs50,000, they incur a huge loss against petrol. Also, the demand for diesel cars is also on the rise. “Compared to other states, CNG is most expensive in Gujarat,” he said. 

Compared to automobile companies, the CNG kit dealers have suffered a huge blow. “We were converting around 6,000 cars every month a year back and now, the conversion has come down to just 60. Customers have realised that the difference between CNG and petrol price is less than Rs2 in the city. So, instead of getting new orders, the old customers are coming to us to resell or at least remove the CNG kit,” said Anil Singhvi, president of the Ahmedabad Automobile Association. 

There are about 425 CNG kit manufacturers, dealers, retrofitters and importers in Gujarat, he said. “We also met finance minister Nitin Patel and energy minister Saurabh Patel recently. They blamed the Centre. The Gujarat government has lost hope in correcting CNG price until the central government takes some steps,” said Sanghvi.  Earlier, on a daily basis, about 60 cars were going to RTO for endorsement, informs Minesh Shah, vice-president of the Gujarat Auto Gas Forum. “Now, RTO is receiving five to 10 cases for cancellation of CNG endorsement. It is a sudden death for the industry,” he rued. 

Even Hyundai Motors has seen a drastic fall in demand for CNG cars. “The company’s CNG kit is expensive than the market price. Hence, we had less demand. However, after the hike in CNG prices, even that demand seems to be disappearing,” said a Hyundai official.

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      There are three main reasons for the drop in demand — the narrowing difference between CNG and diesel prices, poor quality of Chinese CNG kits and the rising price of kits due to depreciation of the rupee .

      The fourth reason is that India is pushing for diesel cars.

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