Tata Motors targets 1.5 lakh units CNG sales in coming 12-18 months

Having marched ahead in the electric vehicle space, Tata Motors wants to capitalise on the high demand for compressed natural gas-powered vehicles. With a portfolio of four vehicles - Tiago, Tigor, Altroz, and the yet to be launched Punch CNG, Tata Motors expects to sell about 1.5 lakh units per annum, within the next couple of years.

As a part of its multi-powertrain strategy that has reaped rewards for the company, Tata Motors expects almost an equal share of EVs, CNGs, and petrol vehicles with flex-fuels making up for some share, by the end of the decade. 

As part of this long-term vision to capture 30% of its total sales from the growing CNG market, Tata Motors has launched the new Altroz with a unique twin-cylinder CNG that is packaged in a way that does not compromise on the boot space – a key criterion for a prospective car buyer.

With the Altroz CNG, the company claims to have addressed all major issues of performance, features, and space - faced by prospective CNG buyers. Once the Altroz EV hits the road, the model will become the only hatchback in the market - which may offer all powertrain alternatives of petrol, diesel, CNG, and an EV sans hybrid.

Shailesh Chandra, MD of Tata Motors Passenger Vehicles told Autocar Professional, the CNG segment has taken off in the last few years and Tata Motors wants to harmonise this technology across its portfolio.

"Our multi-train powertrain strategy has helped us grow faster than the market, and it will continue to drive sales this year too. The CNG penetration is expected to move up from 10% at present to 25% by the end of the decade, we would like to move in line with that or even have a higher share," he said. 

The CNG segment has taken off in the last few years with almost 17 different models being made available in the marketplace, and this has been very well supported by the infrastructure expansion of City Gas Distribution across 5,500 CNG stations versus 1,500 pumps a few years ago. And this number is set to swell to 10,000 stations in the coming year.

Chandra says the company will be patenting its twin cylinder technology and it will also look at implementing the same in its Tiago and Tigor CNG vehicles in the coming years.

At present about 30,000 to 35,000 CNG vehicles are sold every month and surprisingly 80% of them are personal buyers. The share of taxi buyers has come down significantly in the last few years, with the improvement of technology and expansion of the distribution network.

Despite the recent price increase of CNG due to global inflation, the segment grew at almost double the pace at 52% versus market growth of 27%.

The rising CNG prices did slow down the penetration rate, however, post the Kirit Parikh Committee's recommendation to revise the CNG prices lower, the traction has gathered momentum yet again.  

On the current demand environment, Chandra says the momentum continues to remain for its brands and it will be Tata Motors’ endeavour to outpace the market which is estimated to grow by 5-7%. 

He is non-committal to giving any volume guidance for FY24, but he explains that the booking and inquiry levels continue to hold steady and despite the headwinds of interest rates or slowing GDP growth rate, the Indian passenger vehicle market can retail about 3-3.2 lakh vehicles months, which is a "very healthy" number, says Chandra. 

According to people in the know, Tata Motors is working on a production plan of 6-6.2 lakh units for FY24, which is a growth of over 10%.

With regards to CNG sales, it sees a monthly run rate of about 12,000 vehicles per month.