Market Trends of South America CNG and LPG Vehicle Industry
This section covers the major market trends shaping the South America CNG & LPG Vehicle Market according to our research experts:
Low Fuel Cost Driving Growth
The low fuel cost of Liquified Petroleum Gas and Compressed Natural Gas which reduces the per kilometer driving cost of the vehicles is encouraging more vehicle users especially taxi fleet operators to convert their conventional fuel vehicles to auto gas-based vehicles. For instance, in the first three weeks of November 2018, the price of a cubic meter of CNG is on average 35pc cheaper than a liter of gasoline.
NGV is up to 50% cheaper compared to gasoline or diesel, so the direct savings for consumers is significant and immediate and is attracting more demand. In addition, it is the cleanest of all fossil fuels, because, during its combustion, no polluting particles are emitted to the environment, which benefits the health of people around the world.
Cars can typically travel further with a cubic meter of CNG than with a liter of gasoline. The Government of Argentina has revoked its prohibition rule on import of Compressed Natural Gas and Liquified Natural Gas Vehicles in the country, with an aim to drive towards green and clean fuel vehicles and cut the imports of Fossil Fuels. And after that the conversion rate of CNG vehicles in the region is growing with high rate. The number of conversions rose 30% to nearly 30,000 in the first quarter of 2018 from about 23,000 in the year-2017.
Bolivia Dominates the Market in South America Region
In the South American region, Bolivia dominates the market over other countries. The conversion rate of old conventional fuel-based vehicles in the country is rising because of the low operational cost and the rich natural gas reserve in the country.
The country is the largest exporter of the natural gas in the region also. In July 2018, the use of this hydrocarbon represents a cost saving for the user since one cubic meter (m3) of CNG has a cost of Bs 1.66 (USD 24 cents), which is approximately equivalent to 1.13 liters of gasoline that has a cost of Bs 4.22 (USD 61 cents).
Compressed Natural Gas is also a clean fuel and reduces the contamination of the oil of the engine, prolonging its useful life. The vehicle fleet of natural gas-based vehicles is increasing in the country with a high growth rate. For instance, the fleet size of CNG based vehicles in 2019 is estimated to be around 400,000 which has grown 10 times from 40,000 in 2005. This represents 25% of the entire vehicle fleet size in Bolivia with around 200 refueling stations.
