The Global CNG and LPG Vehicle Market Growth, COVID-19 impact and Forecast (2021-2025)
Global CNG and LPG vehicle market is segmented based on vehicle type as passenger vehicles and commercial vehicles; based on fitting type as OEM/factory fitted and aftermarket; based on kit type as venturi and sequential; based on geography as APAC, Europe, North America, and ROW.
Introduction
CNG and LPG vehicles have engines that use compressed natural gas (CNG) or liquid petroleum gas (LPG) as their secondary fuel alternatives. The internal combustion engine operating on CNG or LPG is a well-established technology, and its working mode is similar to that of a traditional fuel spark ignition engine.
Both CNG and LPG are mainly applied in spark ignition engines of dual-fuel vehicles. CNG and LPG are also attaining acceptance in vehicles based on compression ignition engines including diesel-operated heavy vehicles.
Currently, global warming has become a major issue around the world and the public has begun to realize its ramifications. This has led to a sentiment against the use of gasoline and diesel. The emission norms in some regions have become so strict that huge amounts of investment are required to make the vehicles compliant.
Table of Contents
Market Overview
The global specialty vehicle market is expected to grow to $79.27 million units by 2025 at a CAGR of 5.9%.
CNG and LPG vehicles are considered as a green alternative to petroleum-operated vehicles.
The Asia-Pacific region is the largest market for automobiles in the world.
The region, despite the sluggish growth in the Chinese market, the largest automobile market in the world, is expected to lead the growth in the automotive CNG and LPG market.
The COVID-19 pandemic has negatively impacted almost every industry worldwide.
Key Trends
The initial cost of purchasing a natural gas vehicle is more than that of a gasoline vehicle; however, this cost is expected to reduce in the forecast period due to the increasing number of natural gas vehicle manufacturers.
The International Energy Agency (IEA) quotes a payback period of anywhere between two to four years in regions where there is a significant difference in fuel prices. Also, the cost of setting up refueling infrastructure is subsidized in some countries, which may result in more gas stations emerging, and in turn, lead to more people preferring to buy or use NGVs
Key Market Players
The global CNG and LPG market is dominated by global vendors like Fiat, Ford Motor Company, Volkswagen, General Motors, Honda Motor and Hyundai Motor Group
The major market players are expanding their businesses with new innovative technologies so that they can have edge over their competitors.
Growth Drivers and Challenges
The CNG and LPG vehicle market has promising growth potential due to several factors, including the growing demand for low emission vehicles, government’s support for growth in infrastructure, plans to reduce higher emission fuel vehicles across many countries across the world, etc.
Increasing consumer demand for tailored solutions in every segment has boosted the growth of the specialized vehicles market in the world.
Growing inclination towards electric vehicles may hamper the growth of CNG and LPG vehicle market.
Also, refueling time for NGVs is longer than either petrol or diesel vehicles, and sometimes owners have to wait in long queues to get their vehicles refueled due to the insufficient number of refueling stations. A low concentration of refueling stations may also hamper the adoption of these vehicles.
The production and sales of new vehicles had come to a halt across the globe as the whole ecosystem had been disrupted in the initial outbreak of COVID 19. OEMs had to wait until lockdowns were lifted to resume production, which affected their businesses.
Hence, vehicle manufacturers had to adjust the production volume. Also, component manufacturing was suspended, and small Tier II and Tier III manufacturers faced liquidity issues.