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Market Research Report

Global CNG Light Duty Vehicle Market Outlook 2019-2035 : Growth Opportunities | COVID-19 Impact Analysis

Published Date :

2021-03-01

Report Pages :

231

Format :

PDF

Region Covered :

Global

CNG Light Duty Vehicle Market Overview

The global CNG vehicle market stood at USD 1, 09,783.6 Million in 2017 and is expected to attain a valuation of approximately USD 1, 85,000 Mn by the end of the forecast period of 2019-2035. Global compressed natural gas (CNG) market is anticipated to reach USD 130.77 billion by the end of 2021.

Compressed natural gas (CNG) is a fuel which can be used instead of gasoline, diesel fuel and propane/LPG. The CNG is used widely in heavy duty transportation vehicles due to affordability and eco-friendliness. CNG used in the internal combustion engines that have been originally designed for gasoline and diesel that is anticipated to fuel the growth of the CNG market.

Stringent regulations, laid down by governments of various nations, focus on reduction of emissions of greenhouse gases and particulate matter from vehicles in order to curb environmental damage. Along with these regulations, authorities have also been amending emission standard policies dynamically in order to protect the environment. This, in turn, is projected to positively influence the growth of the market over the forecast period.Incumbents of the automotive industry are enhancing their product portfolio and providing compressed natural gas (CNG) and liquefied natural gas (LNG) variants of vehicles in order to comply with evolving policies and standards. Surging demand for vehicles running on CNG and LNG coupled with increasing launches of a variety of natural gas vehicles is likely to propel the market.

Production of natural gas is becoming a safer process as authorities have been implementing strict regulations and industry standards to ensure safe production, storage, transportation, distribution, and use of natural gas. Technological advancements and government support have provided a push to the natural gas industry over the last decade. As a result, improved production and handling processes of natural gas are estimated to augment the market over the forecast period.

CNG Light Duty Vehicle Market Segmentation

By Source Type

  • Associated Gas
  • Non-Associated Gas
  • Unconventional Sources

By Vehicle Type

  • Passenger Vehicles
  • Three Wheelers
  • Light Duty and Heavy Duty Buses and Trucks

By Geography

  • North America (USA and Canada) {Market Share (%), Market Size (USD Billion)}
  • Europe (The United Kingdom, Germany, France, Italy , Spain, Poland, Sweden and Rest of Europe){Market Share(%), Market Size (USD Billion)}
  • Asia-Pacific (China, India, Japan, Singapore, South Korea, Australia,  New Zealand and Rest of Asia-Pacific.)
  • Middle East and Africa (GCC, South Africa and North Africa {Market share (%), Market Size(USD Billion)}
  • Latin America (Brazil, Mexico, Argentina and Rest of Latin America{ Market Share (%), market Size(USD Billion)}

CNG Light Duty Vehicle Market Dynamics

  • Cheaper: CNG is considered cheap and costs almost one third the price of super gasoline, which results in savings in fuel costs.
  • Reduced maintenance cost: CNG does not contain any additives, burns cleanly, and does not leave any by-products behind which contaminates engine oil and spark plugs. The engine remains clean, thereby reducing engine wear. Also, the combustion chamber parts function at peak output for an extended period before it requires service.
  • Environment-Friendly: As CNG has a higher-octane rating over gasoline, CNG engines run more quietly and produce minimum exhaust emissions. Harmful emissions like carbon dioxide, carbon monoxide, and nitrous oxide can be minimized compared to gasoline-powered vehicles.
  • Safer: CNG components are specifically designed and made to international standards. They are monitored to assure safe operation. These fuel systems are sealed, which further prevents spillage and evaporation losses.
  • Look & Feel Like Conventional Cars: While the fuel systems and engines of CNG vehicles are modified to make use of natural gas, these vehicles are similar to existing diesel and gasoline cars. A conventional car can also be converted to run on natural gas.
  • CNG Hybrids Available: Some of the CNG cars are specifically designed to run on gasoline as well as CNG, thereby eliminating the range anxiety, and enabling the driver to drive for a long time.

Challenges

India continues to experience many challenges including CNG conversion quality and safety risks, strained refueling infrastructure with daily long waits for vehicle refueling, and NGV market expansion into smaller cities without the economies of scales that usually justify new, costly infrastructure investments. As the Indian government continues to promote a gas-based economy future, highlighted with the Gas4India campaign launched by the Ministry of Petroleum and Natural Gas in 2016, the potential growth for its NGV market will be supported by the government’s efforts to secure sustained natural gas supplies.

CNG conversion quality and safety concerns also pose another challenge. For instance, in India, unauthorized CNG tanks and cylinder tampering had led to a few instances of explosions, which has led to the negative public perception of CNG use. Improving refueling infrastructure, as well as providing standards for CNG conversions, will be essential to ensure public trust and growth of NGV markets in these countries.

Restraint

However, remote areas are still far from this gas grid, and there are safety concerns with CNG vehicles in dense cities (some cities have strict mandates against CNG conversions

Geographical Market (Dominate Market /Target Opportunities)

Today, there are several factors that drive the growth of NGVs. First, there is a recent growth in natural gas production around the world, which has heightened interest in the use of natural gas in the transportation sector. With the shale revolution in North America, the United States became a net exporter of natural gas in 2017 and expected to become a net energy exporter by 2022.

Lightweight vehicles are in huge demand these days and will retain its growth in the coming years. The increasing sales of per passenger vehicles will propel the demand for light CNG vehicles among the consumers. Per capita spending has increased, especially in developing economies like China, India, and Nigeria. Also, climate awareness and higher vehicle mileage have created an ambient ecosystem for CNG vehicles to propel in these nations. Meanwhile, heavy-duty vehicles like trucks and buses will exhibit sluggish growth due to the higher emphasis on electric trucks and buses across the globe.

It is expected that the number of vehicles with CNG powertrain systems will continue to rise in the years to come. There are many reasons for the increased use of alternative powertrain technology with CNG as fuel. Compared with liquid fuels, CNG produces far fewer CO2 emissions and combusts virtually particle-free. CNG from regenerative sources is already being added to conventional CNG. This makes the fuel even more environmentally friendly.

Increasing advancements in development of CNG vehicles in North America is projected to drive the market in the region. In the U.S., domestic truck makers and automakers are announcing addition of new CNG trucks and cars to their production lines, which is likely to further boost the adoption of CNG vehicles in the region.

Concurrent extraction and discovery of large quantities of natural gas in Canada and the U.S. have led ship owners to consider switching to natural gas. The Great Lakes Maritime Research Institute has been involved in a study supported by industries and government agencies to promote acceptance of natural gas as a primary fuel for U.S. Great Lakes vessels.

Asia Pacific is estimated to emerge as the largest adopter of NGVs during the forecast period on account of development of natural gas infrastructure in countries such as China, India, and Pakistan. Additionally, stringent government policies concerning the environment are poised to spur the growth of the Asia Pacific market.

Robust growth of commercial sectors such as transport and construction is providing an upthrust to the overall market. Rising adoption of economic fuel alternatives such as CNG and LNG in the trucking sector, development of natural gas refueling infrastructure along transport routes, and conversion of fleet vehicles from diesel-based to natural gas-based are some of the key trends stimulating market growth. Additionally, governments are encouraging the use of alternative fuel technologies in vehicles.

Based on vehicle type, the automotive NGV market has been classified into passenger vehicles, three wheelers, and light-duty & heavy-duty buses and trucks. The passenger vehicles segment dominated the market in 2017. Countries such as Thailand, India, and Bangladesh have a greater number of three-wheelers that run on natural gas in circulation.

CNG and LNG find prominent applications in the rail transport sector in countries such as India, U.S., Canada, and Japan. For instance, Florida East Coast Railway (FECR) of North America converted its locomotive fleet to LNG by modifying its GE ES44AC locomotives. Use of natural gas as a fuel for locomotives is still being studied by a few rail companies. Nevertheless, there is a growing potential for natural gas as a fuel for locomotives, considering ongoing research & development activities across countries.

In the marine industry, natural gas is prominently used in shipping activities. Major container liner companies are focusing on research & development activities for manufacturing of LNG-based ships. With emergence of hybrid ships and LNG-run passenger vessels, application of natural gas in the marine industry is growing rapidly.

Leading companies in the marine industry, such as British Columbia Ferry Services Inc.; Viking Line Abp; and Tarbit Shipping AB, are producing vessels that are capable of running on LNG. As a result, the marine industry is posting a spiraling demand for natural gas.

Government subsidiaries in form of financial incentives particularly in Asia Pacific and Latin America is also expected to have a positive impact on the market growth. Positive outlook on exploration of unconventional resources including shale gas particularly in U.S. and China is expected to provide growth opportunities for market participants. High initial investment for CNG automobile storage tanks is expected to remain a key challenge for market participants over the forecast period. Increasing R&D expenditure by automobile manufactures on developing dual fuel engines is expected to remain a critical success factor over the next six years.

In the case of Argentina, the price advantage of CNG to diesel and gasoline remained the strongest driver for the conversion rate of gasoline or diesel vehicles to CNG vehicles. Despite these challenges, Argentina continues to support NGVs with its first LNG trucks delivered this year and plans establish import regulations for CNG vehicles.

China supported natural gas in transportation to curb vehicular air pollution. China first introduced the Clean Vehicles Action for 12 demonstration cities in 1999. The program established percentage targets for alternative fuels, including CNG in bus and taxi fleets, provided R&D funding for industry and financial subsidies for buyers. Up until 2015, the government regulated CNG prices to be lower than gasoline for transportation.

However, remote areas are still far from this gas grid, and there are safety concerns with CNG vehicles in dense cities (some cities have strict mandates against CNG conversions). When international sanctions banned gasoline sales to Iran, it had to look for alternative sources to meet growing fuel demands in the transportation sector. Natural gas provided an easy option as Iran holds one of the world’s largest gas reserves. Italy has the third largest natural gas transmission system in Europe. Although Italy imports most of the natural gas from Russia and Algeria, CNG prices are still significantly lower than gasoline and diesel prices. The popularity of NGVs in Italy remains strong

Mergers and Acquisitions

With Groupe PSA and Fiat Chrysler Automobiles agreed to merge and create world's fourth-largest automaker, the process is expected to be completed by early 2021, hopes Fiat Chrysler Automobiles CEO Michael Manley. Last month, the two automobile giants agreed to combine their forces in a deal worth around $50 billion. The merger announcement came at a time when the global auto industry has been reeling under the worst slowdown of the decade and mounting manufacturing cost amid tighter emission norms.The two auto majors plan to roll out 70 per cent of their vehicles based on two architectures developed by Groupe PSA. Around 5.6 per cent of the total cars produced by the two auto groups will use EMP1 and EMP2 architectures annually, as a previous report revealed. However, these two platforms will be improved for the new products that will be launched across the B, C and D segments. Talking about the platform sharing, Manley mentioned that with customers in different locations still prefer different models there is a room for multiple platforms in a combined group. He said, "That global platform is an elusive beast. This concept of a massive global platform in my mind is almost a myth but that doesn't mean to say we're not going to recruit significant volume.

Players Specific Data (Product Launch, International and Domestic Players Dominance, Sales distribution)

Based on fuel type, the market has been bifurcated into CNG and LNG. The LNG segment is poised to register a higher CAGR during the forecast period owing to increasing use of LNG in the locomotive and aviation industries.The CNG segment is anticipated to dominate the market throughout the same horizon, owing to growing government initiatives. Having realized high initial costs associated with adoption of LNG and CNG vehicles, governments and authorities across the globe are launching various incentive programs in order to simplify process of adoption of such vehicles.Incentive programs launched in the U.S. include the Voluntary Airport Low Emission (VALE) program, the Environmental Protection Agency’s (EPA) Clean Construction & Clean Agriculture program, and the Congestion Mitigation and Air Quality (CMAQ) Improvement Program.

Owing to several technological innovations in the trucking sector in recent times, there is a rising interest towards LNG as a fuel for heavy-duty trucks. Many truck fleets from the transportation sector are switching to alternative fuel technologies to comply with stringent government regulations concerning the environment. As a result, NGV manufacturers are focusing on LNG trucks that were previously not in demand. Many companies in the transportation sector are testing LNG trucks for haulage since these vehicles are cost-effective and have lower carbon emissions as compared to those with diesel engines.Development of refueling infrastructure for CNG and LNG vehicles is gaining momentum worldwide. Energy gas companies such as Gasum Oy (Finland) and Gazprom (Russia) made significant contributions to natural gas infrastructure by establishing new CNG and LNG fueling stations in 2016 and 2017. Rising demand for natural gas from automotive consumers along with increasing adoption of CNG and LNG vehicles by commercial and government fleets is expected to promote more players to make investments in infrastructure development.

CNG Light Duty Vehicle Competitive Landscape

  • Toyota Motor Corporation
  • Honda Motor Co. Ltd.
  • Daimler AG
  • Hyundai Motor Company
  • Fiat Chrysler Automobiles
  • Groupe PSA
  • General Motors
  • Volvo Group
  • Renault
  • Suzuki Motor Corporation
  • Ford Motor Company
  • Volkswagen Group.

COVID-19 impact on "CNG Light Duty Vehicle Market"

The report analyses and includes complete detailed chapter of 50-70 pages about the short term & long terms impact of COVID-19 outbreak on each segment of "CNG Light Duty Vehicle Market" along with government measures to support the sector. It also showcases the current market landscape during COVID, impact of the virus on leading companies, expected demand schedule and supply chain in the industry and other various major factors. This will help you identify those companies that may benefit from this pandemic as well as those that will lose out.

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Key questions answered in this research report

  • What is the total market size by 2035 and what would be the expected growth rate of sales?
  • What are the total sales in 2018-19 and what would be the expected demand over the forecast period?
  • What are the recent developments and business strategy of companies?
  • What are the market opportunities for the existing and entry level players?
  • What are the key market trends?
  • What are the factors which are driving this market?
  • What are the major barriers to market growth?
  • Who are the key vendors in this market space?

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  • CNG Light Duty Vehicle Market Facilitate decision-making based on strong historic and forecast data for
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Global CNG Light Duty Vehicle Market Outlook 2019-2035 : Growth Opportunities | COVID-19 Impact Analysis

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