Tata Motors to double CNG variants as demand surges

The company, which recently launched the CNG variant of small car Altroz, said new launches in the segment, coupled with continued price differential with petrol and increased availability of CNG dispensing stations have been driving demand.

Tata Motors, the country’s biggest automotive group by revenue, plans to double the share of CNG vehicles in its overall sales in FY24 on the back of healthy customer demand for the fuel option after the Centre rationalised natural gas prices.

The company, which recently launched the CNG variant of small car Altroz, said new launches in the segment, coupled with continued price differential with petrol and increased availability of CNG dispensing stations have been driving demand. Tata Motors Managing Director Shailesh Chandra told reporters that with a new model in its portfolio, the company expects 10-12% of its sales to come from CNG vehicles this fiscal, up from 6% in FY23.

“Despite gas prices going up, sales of CNG vehicles went up by 50% in the last financial year, overall car sales rose 27% in the same period. There continues to be a substantial price differential between CNG and petrol. That, along with several new launches in the segment, is making customers take a long-term view and opt for CNG variants,” Chandra said.

Tata Motors offers CNG options in Tiago, Tigor and Altroz presently. Given lower running costs, automakers from Maruti Suzuki to Hyundai and Tata Motors have, in fact, been betting on CNG as an affordable option for the masses, especially at the lower end of the market. At present, CNG costs ₹73.59 a kg in Delhi and ₹79 in Mumbai. Petrol retailed at ₹96.72 in Delhi and ₹106.31 in Mumbai Monday. As many as 34,000-35,000 CNG vehicles are sold in the local market every month, presently.

“The value proposition of CNG cars remains strong. As the network (for dispensing CNG) grows, consumers will feel more confident in owning CNG vehicles. The share of CNG vehicles in overall sales in the industry will grow further,” he said.