Car buyers in India are increasingly opting for compressed natural gas (CNG)-powered vehicles amid high fuel prices and increased choices in a sluggish market.
The share of CNG models in total passenger vehicle sales more than tripled in five years to 19.5per cent last fiscal—pulling ahead of diesel cars—from 6.3per cent in 2019-20.
The share of petrol cars fell sharply to 57.7per cent from 76.3per cent during the same period, attesting this pronounced shift, while diesel car sales have remained largely constant at about 17-19per cent in this period, shows data from industry body Society of Indian Automobile Manufacturers (SIAM).
And in the ongoing fiscal, for the first time, more than one million CNG cars, sedans and SUVs are expected to be sold—an increase of about 20per cent over 839,000 units sold in FY25. This while total car sales are expected to inch up by 1-2per cent in FY26, according to industry estimates.
“This is one category which has surprised everyone,” said Vivek Srivatsa, chief commercial officer at Tata Passenger Electric Mobility (TPEM) who also oversees Tata Motors’ PV (internal combustion engine) operations.
Wide Range of Product Offerings
“It is growing in a robust manner, with availability improving,” according to TPEM’s Srivatsa.The growth is largely driven by individual buyers even as the taxi segment accounts for about one-fifth of CNG car sales, as per industry estimates.
Industry watchers attribute this to high prices of petrol and diesel fuel, increased network of CNG stations, and a wide range of product offerings from carmakers including Maruti Suzuki, Hyundai Motor, Tata Motors and Nissan.
The number of vehicles with CNG variants more than doubled to 25 in FY25 from 11 in FY21, according to industry estimates.
Union petroleum and natural gas minister Hardeep Singh Puri recently said the number of CNG retail outlets has increased 20 times in the last decade.
The government is working on increasing the number of CNG dispensing stations across the country and is targeting having 17,500 CNG pumps in place by 2030, up from 7,400 in 2025.
While the government is promoting electric vehicles (EVs) with various incentives to reduce carbon emissions and dependence on imported fossil fuels, car buyers mostly prefer CNG due to lower purchase compared to EVs, and an extensive network of CNG stations. While EVs boast lower running costs, CNG is considerably cheaper than petrol and diesel.
A common drawback of CNG vehicles is reduced boot space due to the CNG cylinder.
Carmakers like Tata Motors and Hyundai have come up with a twin cylinder solution for this. They have replaced the large CNG cylinder with two thin cylinders with equal capacity to offer more boot space.
“With the reducing life of diesel as mandated by NGT (National Green Tribunal), which is now gaining more traction in more states beyond Delhi-NCR, more and more customers are beginning to invest in other fuel options and preferences are changing fast,” said Saurabh Vatsa, managing director of Nissan Motor India.
The Japanese carmaker last month started offering an alternate fuel option in the form of a government-approved CNG retrofitment kit.
“I think it’s really important that we continue to focus on what is environmentally friendlier and easier to manage without denting the pocket of the consumer,” Vatsa said.
Some of the popular CNG models in India include Maruti WagonR, Hyundai Exter and Tata Punch.
“Our CNG car sales in India reached over 600,000 units last year, and this year we hope to reach around 700,000 units,” R C Bhargava, chairman of Maruti Suzuki, said recently.
CNG cars accounted for one in every three cars (34%) that the country’s leading carmaker sold in FY25, when its sales touched 1.76 million units.
“CNG has emerged as a very good option for consumers at the entry-level, for all vehicles priced less than ₹11 lakh,” said Tarun Garg, chief operating officer (COO) of Hyundai Motor India.
