This week, Hindustan Motors and Maruti have launched the LPG and CNG versions of Wagon R and Lancer models, respectively. General Motors had, a few weeks ago, announced its plans to launch the CNG version of Chevrolet Optra.
Hyundai, Toyota and Ford are also studying the feasibility of launching gas-based models. Hyundai is studying the feasibility of making LPG as well as CNG engines.
Alternative-fuel engines will be localised at the companies' plants and will be fitted on the entry and mid-segment models.
The central government is believed to be in the process of extending an eight per cent excise duty concession to small cars being run on fuels such as CNG and LPG.
If it happens, all small cars - falling under the 4-metre length cap - running on alternative fuels will come under the purview of 16 per cent excise levy. They attract 24 per cent excise duty now.
"Alternative fuels like CNG and LPG are more efficient and environment friendly compared with petrol and diesel. The fuel cost is also cheaper," said a consultant at the New Delhi-based Synovate Motoresearch.
According to him, initially the number of new alternative-fuel engine-based models will be fewer in number as there are only 10-15 gas refuelling centres.
"Initially, the gas-based models will be launched in metros such as Delhi, Mumbai and Hyderabad. And as and when the number of fuel stations rise, the models will be launched from other cities and small towns," he said.
"With the demand for alternative fuels surging, the government is gearing up to set up the number of CNGPG refuelling stations," he said.
Maruti had unveiled the LPG WagonR at the Auto Expo in January. The car is a dual-fuel based one, where there is a regular petrol tank and a circular LPG cylinder.
