Growth in NG Vehicle Market Restrained by Costs, Lack of Refilling Stations

According to a new report, the market for compressed natural gas vehicles, while still in its infancy despite a growth in sales, especially through 2009 to 2014, shows a high level of concentration in a small number of countries.

At issue is a relatively low penetration in the major automotive markets and limited supply of models by OEMs. The latter, according to the authors, “is mainly due to the significant upfront purchase cost in comparison with petroleum-fueled vehicles, and due to the relatively high cost of aftermarket conversion. ]

However, the market represents significant potential and is expected to record robust growth in the forecast period.

Investment in new CNG stations will help overcome the lack of a sufficient re-fuelling infrastructure, the biggest restraint the market faces. Additionally, the introduction of a greater breadth of CNG models by OEMs will enable both reduction in the conversion cost and greater NGV ownership as the price advantage of Natural Gas over other fuels is anticipated to continue over the next decade.

That said, this price advantage, though hampered by the slump in oil prices in late 2014 and early 2015, is expected to stabilize over the near-term and ultimately facilitate a greater level of CNG Passenger Car adoption.

Noted the authors, visiongain, “the markets of China, India and Iran are expected by to continue their strong growth, as gas infrastructure develops and re-fuelling stations are constructed to develop a CNG fueling network with greater coverage.

Latin America is another market forecast to grow steadfastly, and within Europe the national markets of Italy and Germany show considerable potential.

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Category: Consumer