Aftermarket CNG kit manufacturers are facing a hard time owing to the upcoming BSVI emission norms which might end the use of CNG retro-fitment kits on vehicles.
Retailers of the the aftermarket CNG kits are sitting on the edge as the new BSVI emission norms are approaching. Even though the new regulations are yet to be rolled out no official statement has been made regarding the future of aftermarket CNG kits, it is feared that the implementation of the upcoming BSVI vehicles will mean an end for retrofitted CNG kit industry.
CNG retro-fitment companies have a deep concern about their business's future in the BSVI era
The concern is reasonable since, under the new BSVI standards, the CNG BSVI vehicles would require an advanced catalyzer which can only be found in factory-fitted units. Also, if the retrofitted CNG Kits are allowed, the question remains if those vehicles will be compliant with the new emission norms. The answer to these questions along with other technical requirements for aftermarket CNG fitment will be addressed in the final decision.
According to some sources, it is unlikely that aftermarket CNG kit will be banned. In all likelihood, the BSVI norms will set higher standards for retro-fitted CNG vehicles, posing some technical challenges for the industry. Apart from the technical and legal obstacles, the post-BSVI era also comes with a pricing burden for the CNG kit manufacturers. It is estimated that the price for CNG conversion will be Rs 30,000 higher than the current Rs 40,000 for BSIV vehicles. The increasing price will discourage customers from using CNG retro-fitment.
It is feared that the BSVI norms will put an end to the aftermarket CNG kits and the related industry
Even though the new norms will be a big challenge for the retro-fitment market in particular, it will open various opportunities for the CNG market in general. Currently, in the market, OEMs have started to discontinue production of small diesel models, meaning the demand for CNG vehicles will increase owing to its low cost of ownership and acquisitions compared to other BSVI vehicles with big diesel engines. According to Suraj Ghosh, Principal Analyst, Powertrain & Compliance Forecasts, IHS Markit, CNG vehicle is unlikely to overthrow the diesel engines, it will surely gain a larger share in the market.
The retro-fitted CNG vehicles account for 60 to 65 per cent of 1.6 million CNG light vehicles running on the road. The dominance of the aftermarket CNG fitment over the OEM unit derives from a 1998 Supreme Court regulation which requires all commercial passenger vehicles in Delhi to run on CNG, which had led to the rise of aftermarket CNG fitment. This surge in the CNG vehicle demand also made the OEMs eye for this segment. In the post BSVI era, it is likely that OEMs could finally turn the table and gain an advantage over the CNG retro-fitment companies.