CNG-powered cars hitting sales high

Rising pump prices, Malaysian ban on petrol sales to foreign cars fuel increase
Samuel Ee, Business Times 4 Jun 08;

SALES of cars that can run on compressed natural gas (CNG) are powering ahead on the back of soaring petrol prices, with talk of a Malaysian ban on petrol sales to drivers of foreign-registered cars fuelling even more interest in them.

In the first four months of this year, 290 CNG cars - so-called because they can run on petrol or gas - were registered, according to the Land Transport Authority. In contrast, only 34 CNG cars were registered in the whole of 2007.

There are only two OEM (original equipment manufacturer) models on the market here - the Mercedes-Benz E200 NGT (Natural Gas Technology) and the 1.6-litre Chevrolet Optra CNG variant. The majority of CNG vehicles on the road here are petrol engine cars retrofitted with kits so they can also run on gas.

A CNG conversion can cost from $3,400 to as much as $4,500, depending on the size of the gas tank to be installed. Despite the conversion cost, however, a CNG car can have a lower list price because of the green vehicle rebate for such cars, which is currently set at 40 per cent of OMV (open market value).

For example, a conventional Honda Stream MPV at parallel importer VinCar costs about $72,000, including COE. After a CNG conversion, a Stream costs about $69,000, or $3,000 less. This is after a conversion fee of $4,000 but with a green rebate of $7,000 (40 per cent of an average OMV of $17,500).

Not surprisingly, VinCar is selling about 20 CNG cars a month. 'Some of the more popular models are the Toyota Estima, RAV4, Vanguard, Axio and Wish, as well as the Honda Stream,' says VinCar's Vincent Tan. 'Our customers say they are attracted by the green rebate and lower fuel consumption.'

Besides a litre of gas costing less than half as much as the lowest grade of petrol, CNG has a higher octane rating than petrol, meaning CNG vehicles are more efficient.

Nik Ang of 8th Gear agrees. The service agent for conversion specialist C Melchers says demand for retrofits picked up this year when two CNG refuelling stations at Mandai and Jalan Buroh opened. Before that, there was only one CNG refuelling station - and it was on Jurong Island.

C Melchers is one of four companies here offering CNG conversions. And Mr Ang says: 'After Malaysia announced a fuel ban on Singapore-registered cars, we got even more enquiries.'

According to him, there is more to CNG than just cost savings. 'CNG is eco-friendly because it reduces exhaust emissions, and that is more important than the price,' he says.

CNG-powered vehicles emit 70 per cent less carbon monoxide than an equivalent petrol-powered vehicle, while carbon dioxide emissions are up to 20 per cent lower.

The high price of petrol has also seen an increase in sales of petrol-electric hybrid cars, though the jump in registrations is not as sharp as that of CNG cars.

In the first four months of 2008, registrations of the Toyota Prius and Honda Civic Hybrid totalled 289 units, compared with 678 units for the whole of 2007.

But overall, the number of alternative fuel vehicles is still small compared with conventional passenger cars. From January to April this year, a total of 33,428 cars were registered in Singapore.