South America CNG and LPG Vehicle Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The South America CNG and LPG Vehicle Market is projected to grow with a CAGR of more than 3 % during the forecast period.

Key Highlights

• Owing to the decreasing in air quality because of the rising air pollution, along with the high fluctuations in the crude oil prices in the international markets, alternative fuels vehicles demands are rising all over the world.
• The market is primarily driven by the factors such as with the use of CNG and LPG fuel vehicles the carbon emission in the environment can be controlled as compared to conventional fuels like Diesel and Petrol, the promotion of CNG and LPG vehicles by the governments in the region by providing financial aids for the conversion of conventional fuel vehicles to auto gas vehicles, also the increase in spending for infrastructure like auto gas stations is attracting demand for CNG and LPG vehicles in the region.
• However, the rise of flexi fuel cars, like ethanol fuel-based vehicle in the region is affecting the growth of CNG and LPV fuel-based vehicles in the South American region. For instance, in 2019 Brazil's consumption of ethanol reached 32.8 billion liters (8.6 billion gallons), a 10.5% year-on-year increase

Key Market Trends

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.

Competitive Landscape

The South America CNG and LPG Vehicle Market is fragmented, with many players accounting for a small market share. Some of the prominent companies in the South America CNG and LPG Vehicle Market are TA Gas Technology, Fiat, Encava, Cummins, BRC Gas Equipments and others.

• In February 2019, Uber has signed an exclusive collaboration contract with Landi Renzo Brasil, for the conversion of cars owned by Uber partners all over Brazil from gasoline to natural gas with the fuel solutions offered by Landi Renzo.
• In March 2019, the Municipal Government of Juarez, a city in Mexico, has leased 400 new patrol units for the Public Security Secretariat (SSPM) fleet, eighty (20%) of which have been or are in the process of being converted to CNG.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support