CNG car sales likely to shoot up this fiscal

New Delhi: Sales of CNG vehicles are projected to shoot up in strong double-digits in the current financial year on lower running costs and wider availability of the fuel, even as rising petrol and diesel prices hurt demand amid weak market sentiment.

Maruti Suzuki expects sales of CNG vehicles to grow 36% to 144,000 units in FY21. The company has eight CNG-powered vehicles in its portfolio and plans to make the option available on all small cars.

South Korean rival Hyundai plans to launch the fuel option in the Hyundai XCent sedan later this year, targeting customers especially in the fleet segment. Between them, Maruti Suzuki and Hyundai sell about a dozen factory-fitted CNG models.

The cost of running a CNG vehicle is about Rs 1.5 per km, which is less than half that of petrol and diesel vehicles. The premium paid on the acquisition cost of a CNG vehicle at ?50,000-60,000 is lower than Rs 1,25,000-1,50,000 of diesel vehicles.

“Even if we do not consider the narrowing price differential between petrol and diesel (which has triggered a shift in consumer preference for petrol vehicles), the price of fuel itself has increased significantly, which is a negative for the industry. Sales volumes will get affected if fuel prices remain high. This is where CNG emerges as a viable option,” said Shashank Srivastava, executive director (marketing and sales), at Maruti Suzuki.