alternate fuel vehicles for effective co2 reduction
DESCRIPTION
Alternate Fuel Vehicle OE Sales (Europe), 2010: LPG – 278,000, CNG – 66,000. Frost & Sullivan expects the market to grow to about 1 Million by 2020, with LPG car sales amounting to 650,000 units and CNG car sales adding up to 350,000 units.TRANSCRIPT
Executive Analysis of the European and North American LPG and CNG Original Equipment Market
Alternate Fuel vehicles make a strong case to effectively reduceAlternate Fuel vehicles make a strong case to effectively reduce
COCO22 EmissionsEmissions
Priyank Aggarwal, Research Analyst
Automotive & Transportation
31, July, 2012
© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of
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Priyank Aggarwal
Functional Expertise
� Market Research and Consulting Automotive & Transportation
� Automotive Design and Development.
� Experience in telecom network setup, team coordination and resource management.
Industry Expertise
� Exposure to Global Trends in Automotive Industry.
� Understanding synergies of existing and upcoming technologies in powertrain market.
What I bring to the Team
• Knowledge of leading Automotive Technologies and Understanding of the market dynamics.
Career Highlights
� One and half years experience in Market Research, Forecasting, Market Entry Strategy and
Consulting.
� Before Frost & Sullivan experience in Telecom Network Setup and Optimization. Business Process
management, Team Development and training at Bank of America Continuum Solutions Limited (BACS). Adaptation of greener technologies at BACS and best practices for higher process efficiency.
Education
� M.S., Automotive Engineering, Kingston University, London, U.K.
� B.E., Electronics & Communication, SEAS, M.D.U., India.
� H.N.D., Electrical & Electronics Engineering, Edexcel, U.K.
Priyank AggarwalResearch Analyst, Automotive &Transportation,GIC, Europe.
Frost & Sullivan GlobalChennai, India
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Focus Points
Section
Key Takeaway Facts Europe and North America
Alternate Fuel Market Breakdown by OEMs EU & NA
Valvetrain Market Trends
EU & NA Market share analysis LPG and CNG
Alternate Fuel Market Snapshot EU & NA
Alternate Fuel Market Drivers, Restraints and Challenges
Key OEM Market Takeaways
Key Supplier Market Takeaways
Appendix
4
Key Takeaway Facts Europe
1
3
2
Alternate Fuel Vehicle OE Sales (Europe), 2010: LPG – 278,000, CNG – 66,000. Frost & Sullivan expects the market to grow to about 1 Million by 2020, with LPG car sales amounting to 650,000 units and CNG car sales adding up to 350,000 units
Many European countries are promoting CNG and its derivatives, such as bio-methane
as it is completely renewable. Countries like Italy are supporting commercial bio-
methane production and injection into the national gas grid, while some countries
provide indirect incentives like zero tax on Bio-CNG, special parking spaces for
alternate fuel vehicles and toll free access to city centers
Source: Frost & Sullivan Analysis
4
The market is dominated by Fiat (26% LPG and 88% CNG). Fiat’s share in LPG car sales has declined over the last three years. Other OEMs, like GM (17%), Ford (15 %), PSA (12 %) and Renault Nissan (11%), have penetrated the market
Given a total of over 36,000 LPG and 2,400 CNG fuelling stations in Europe, Turkey (8,500), Poland(6,350) and Germany (6,320) lead in LPG fuelling stations, while Austria (192), Italy (696) and Germany (896) have the lead in CNG fuelling stations
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Key Takeaway Facts North America
1
3
2
Alternate Fuel Vehicle OE Sales (North America), 2010: LPG – 2,000, CNG – 5,000. The North American market is likely to grow to approximately 350,000 units by 2020, with LPG OE sales of 150,000 units and CNG OE sales close to 200,000 units
The Natural Gas Act and Propane Gas Act are expected to determine the growth of CNG
and LPG vehicle sales in North America, from 2011 to 2013. It will also enable OEMs in
the United States to take an informed decision on their LPG/CNG line-up
Source: Frost & Sullivan Analysis
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North American sales are dominated by Ford and GM in the light commercial vehicle (LCV) segment with OE fitments, as well as Honda’s Civic, which is available in passenger and fleet variants. The focus is on widening the availability and service network
North America currently has over 1,000 natural gas stations and 2,500 LPG fuelling stations. Of the 35 states in the U.S., 33 have natural gas reserves and should help North America reduce their dependency on crude oil imports
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Alternate Fuel Vehicle Sales North America, 2011
Alternate Fuel Vehicle Market Breakdown by OEMs, EU & NA
Alternate Fuel Vehicle Sales Europe, 2011
EUEU
NANA
Source: Frost & Sullivan Analysis
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2011 Market
Units/Volume
2011 Market
Units/Volume
~55,000
(-16.7%)
~55,000
(-16.7%)
Cost of LPG
Compatibility OEM
Cost of LPG
Compatibility OEM
€1500*€1500*
(2011, Average)
2011 Market
Units/Volume
2011 Market
Units/Volume
~300,000
10%
~300,000
10%
Cost of CNG
Compatibility OEM
Cost of CNG
Compatibility OEM
€3000*€3000*
(2011, Average)
European Market Share Analysis LPG and CNG Vehicles
Note: *Cost on and above a conventional 1.4l-1.8l (Naturally Aspirated, MPFI, No EGR) Gasoline Engine.
LPG Market Breakdown by OEMs, EU, 2011 CNG Market Breakdown by OEMs, EU, 2011
(CNG Sales, Growth)(LPG Sales, Growth)
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2011 Market
Units/Volume
2011 Market
Units/Volume
~7,500~7,500
2011 Market
Units/Volume
2011 Market
Units/Volume
~4,000~4,000
North American Market Share Analysis LPG and CNG Vehicles
Source: Frost & Sullivan Analysis.Note: All figures are rounded; the base year is 2010,
(CNG Sales)(LPG Sales)
LPG Market Breakdown by OEMs, NA, 2011 CNG Market Breakdown by OEMs, NA, 2011
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Alternate Fuel Market Snapshot Europe
Source: Frost & Sullivan Analysis.
LPG and CNG Percentage Penetration, Europe, 2010, 2020
20102010 20202020
2020 Market
Units/Volume
Forecast
2020 Market
Units/Volume
Forecast
~350,000~350,000
2010-11 Market
Growth (EU)
2010-11 Market
Growth (EU)
4.7%4.7%
Combined
Annual Growth Rate (LPG)
Combined
Annual Growth Rate (LPG)
8-9%8-9%
(CAGR 2011-20)(CNG Sales)
2020 Market
Units/Volume
Forecast
2020 Market
Units/Volume
Forecast
~650,000~650,000
(LPG Sales)
Combined
Annual Growth Rate (CNG)
Combined
Annual Growth Rate (CNG)
15-16%15-16%
(CAGR 2011-20)(Total Market)
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Alternate Fuel Market Snapshot North America
Source: Frost & Sullivan Analysis.
LPG and CNG Percentage Penetration, North America, 2010, 2020
2020 Market
Units/Volume
Forecast
2020 Market
Units/Volume
Forecast
~200,000~200,000
2010-11 Market
Growth Rate (NA)
2010-11 Market
Growth Rate (NA)
44%44%
Combined
Annual Growth Rate (LPG)
Combined
Annual Growth Rate (LPG)
35-36%35-36%
(CAGR 2011-20)(CNG Sales)
2020 Market
Units/Volume
Forecast
2020 Market
Units/Volume
Forecast
~150,000~150,000
(LPG Sales)
Combined
Annual Growth Rate (CNG)
Combined
Annual Growth Rate (CNG)
36-37%36-37%
(CAGR 2011-20)
20102010 20202020
(Total Market)
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Drivers Alternate Fuel Market
Drivers
1Existing and upcoming legislative aid and incentives for transition to
alternative fuels in many countries (Germany, Sweden, North America)
2Expansion of Alternate Fuel product lines by OEMs in favourable
regions (Fiat, GM, Ford and VW)
3Governments funded infrastructure likely to support alternative fuels
market growth (Germany, North America)
4Alternative fuels vehicles benefit from up to 30% cleaner emissions
and are up to 50% economical to run than Gasoline, close to 30%economical than Diesel
Source: Frost & Sullivan Analysis
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Restraints Alternate Fuel Market
Restraints
1Slow developing Servicing and Fuelling infrastructure for alternate
fuels (North America)
2Reduction or absence of government or industry support for
alternate fuels in some key markets (Italy, France)
3Competitive pressure from other alternative powertrain technologies
(Hybrids, EVs)
4 Hesitation to adopt LPG/CNG vehicles among global population
Source: Frost & Sullivan Analysis
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Challenges to Alternate Fuel Adoption for Fleet and Private Owners
Payback Period, Fuel Price Advantage
Insufficient
Payback Period, Fuel Price Advantage
Insufficient
Vehicle Performance Under Load, Concerns
Around Ability to Get The Job Done
Vehicle Performance Under Load, Concerns
Around Ability to Get The Job Done
Fuel Availability, Inadequate Service Infrastructure
Fuel Availability, Inadequate Service Infrastructure
Awaiting Real World Test Results to Gauge Fuel Efficiency/Economy
Awaiting Real World Test Results to Gauge Fuel Efficiency/Economy
Warranty Coverage, Not Extensive Enough For Unproven Technology
Warranty Coverage, Not Extensive Enough For Unproven Technology
Lack of Government Decision on Subsidies
Lack of Government Decision on Subsidies
Spare Parts Availability, Downtime Concerns
Spare Parts Availability, Downtime Concerns
*Impact increasing from 0 to 5, with 0 the least impacting factor and 5 the highest. Source: Frost & Sullivan analysis.
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Key OEM Market Takeaways
Early market entry in North America, with an extensive product line-up would prove advantageous in capturing
market share
Reducing the average fleet CO2 emissions presents an opportunity for OEMs that have no or very less presence in the
alternate fuel market
CNG and Bio-Methane production can present an opportunity for OEMs as it is highly subsidised and can provide a steady
source of income and promote alternate fuels further
Europe has a mature LPG market, but its growing CNG market presents an opportunity for OEMs to introduce a good
line-up and increase their market penetration with CNG vehicles
OEMs need to develop vehicle platforms with alternate fuel compatibility in mind, to introduce LPG, CNG variants once the
demand picks up in new markets
LPG CNG
Market
OEMs
Source: Frost & Sullivan
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Key Suppliers Market Takeaways
LPG CNG
Market
Suppliers
Source: Frost & Sullivan
Alternate Fuel Market in the U.S. is very small, hence suppliers need to focus on quality, reliability and servicing as
the initial impression may influence future penetration
Natural Gas Law and Propane Gas Law in U.S. Senate to benefit alternate fuel suppliers and distribution entities with strong
growth close to 2015-16
New alternate fuel vehicles to have state of the art storage, engine management and injection technology to bring
alternate fuel vehicles at par with their counterparts
Bio-methane production in Europe is creating an opportunity for CNG suppliers to streamline production as many
governments plan to inject it into their domestic gas grid
New markets may witness growth in CNG rather than LPG owing to lobbying and reduced dependency on crude oil
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