Home / Companies / More and bigger cars to run on alternative fuel

New Delhi: US auto maker General Motors Co.’s (GM) Indian subsidiary launched a compressed natural gas (CNG) version of the Aveo sedan earlier this month, marking the first time Indian buyers have had an alternative fuel option for a mid-size car.

Rival Maruti Suzuki India Ltd, which sells half the cars in the country across segments, is working on a multi-point fuel injection system for alternative fuels and hopes to launch this in two months.

Long considered a source of incremental taxi sales, alternative fuel models—which use CNG and liquefied petroleum gas (LPG) instead of petrol—have been catching the attention of car makers over the past year.

Such cars are typically hampered by lack of power. But manufacturers say with improvements in technology, they can also be marketed to value-conscious buyers yet to purchase their first car.

Maruti Suzuki plans to have one alternative fuel model car in every segment.

“Whatever drawbacks there were in terms of drop of power will not be there after this," said I.V. Rao, managing executive officer (engineering) at Maruti Suzuki, referring to the alternative fuel injection system.

The technology is being developed in collaboration with Japanese engineers at Suzuki Motor Corp., which holds a majority stake in the firm.

Maruti Suzuki launched a new version of the WagonR model last month, but continues to sell older versions known as the WagonR Duo, which runs on both petrol and LPG. At 25% of total WagonR sales, the numbers are too large to ignore, the firm says.

Hyundai Motor India Ltd and Toyota Kirloskar Motor Pvt. Ltd are the other firms selling alternative fuel models. Companies do not release separate sales figures for such cars.

GM has paid special attention to calibrating alternative fuel cars for the Indian market at the GM technical centre, the firm’s research and development facility in Bangalore.

The centre is working on an LPG version of the Beat and plans to launch it this year.

“If you’ve had a chance to drive the LPG, you can do a blind test where you press a button to switch from LPG to petrol and there’s no way you can tell the difference," said Karl Slym, president and managing director of GM India.

An LPG version made up 7% of total sales of the Spark model. Slym said this was three times what the company had expected, and is hoping to replicate the success with Aveo.

But problems remain. “CNG is prone to huge regulatory risk, and both customers and manufacturers are unwilling to assume this risk," said Mahantesh Sabarad, analyst at Fortune Equity Brokers Pvt. Ltd.

Indian Oil Corp. Ltd sells LPG AutoGas at 150 cities in India. But CNG is available only in Mumbai, New Delhi and Gujarat. Long queues at gas pumps often deter potential buyers.

“I would like to also convert my other car to CNG, but the long lines outside CNG stations give me second thoughts," said Gurbir Singh, owner of a CNG Santro, who drives at least 80km a day.

He said he’s not too concerned with a rise in prices as CNG cars will still remain cheaper to run.

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