By :L.K.S. Chauhan, Ch.Mgr.(Auto LPG)Indian Oil Corporation Ltd.Head Office, Mumbai
15th Feb, 2012Taj Mahal Hotel, New Delhi
WLPGA Regional Summit
Overview
Of
Indian 2-wheeler
Autogas Market
Auto LPG Growth : Infrastructure
‐
200
400
600
800
1 000
1 200
2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11
182 307
536
738
920 1 042
No. of Stations
No. of stations
Year 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11
No. of Stations 182 307 536 738 920 1,042
Auto LPG Growth : Sales
‐
100,00
200,00
300,00
400,00
2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11
89,58
185,98
282,35
248,19
341,31 351,03
Sales (TMTs)
Sales (TMTs)
Year 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11
Sales (TMTs) 89.58 185.98 282.35 248.19 341.31 351.03
Industry: ALDS Infrastructure
IOC332
Essar Oil2
HPCL208
CleanFUEL4
RIL132
IPPL6
BPCL88
SHV20
Aegis 62
Vanaz22
Elf /Total LPG*27
Gas Energy22
Others137
Company 2011-12 (Upto Jan'12) Share %
IOCL 332 31HPCL 208 20RIL 132 12BPCL 88 8Aegis 62 6Total LPG 27 3Gas Energy 22 2Vanaz 22 2SHV 20 2IPPL 6 1CleanFUEL 4 0Essar Oil 2 0Others 137 13TOTAL 1062 100
Industry: Auto LPG Sale
IOC91028,00
Essar Oil119,24
HPCL48960,00
CleanFUEL332,03
BPCL44980,00
IPPL2379,00
RIL21928,00
Vanaz3133,55
Aegis 16132,00
SHV4528,54
Elf /Total LPG*14185,00
Gas Energy5397,00
Others37486,51 Company 2011-12 (Upto
Jan'12)-MT Share %
IOCL 91028 31HPCL 48960 17BPCL 44980 15RIL 21928 8Aegis 16132 6Total LPG 14185 5Gas Energy 5397 2SHV 4528 2Vanaz 3133 1IPPL 2379 1CleanFUEL 332 0Essar Oil 119 0Others 37486 13TOTAL 290588 100
“PROJECT GREENSTROKE”AN IAC INITIATIVE
Project Greenstroke
IAC
ALPG Mktg. Cos
ALPG Kit Manufacturers
ALPG Equipment
Manufacturers
ApprovalAgencies
Vehicle sales in India, 2010-11
Category 2010‐11 sales % share
Passenger Vehicles 25,20,421 16.25%
Commercial Vehicles 6,76,408 4.36%
Three Wheelers 5,26,022 3.39%
Two Wheelers 1,17,90,305 76.00%
Grand Total 1,55,13,156 100.00%
Vehicle sales in India
‐
2 000 000
4 000 000
6 000 000
8 000 000
10 000 000
12 000 000
14 000 000
2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11
No of veh
icles
Sales trend
Passenger Vehicles
Commercial Vehicles
Three Wheelers
Two Wheelers
Fastest growing segment : 2 wheelers
Reasons for 2 Wheeler Growth
• Growing working population• Increased access to credit and lower interest
loans• Increased consumer embrace of financial
products• Upward migration of household income
levels• Fast paced urbanization to rise from 28% to
40% by 2020• Middle class expanding by 30 – 40 million
every year
2 W – Population in India, Mar 2011
No. of vehicles
Bikes
Scooters
Mopeds
Category No. of vehicles (cr) Share
Bikes 4.00 79.05%Scooters 0.76 15.02%Mopeds 0.30 5.93%
Total 5.06 100.00%
Total operating 2-wheelers : 5.06 Cr.
Vision
AutoLPG as the most preferred fuel for 2 wheelers consumers in India
Mission
Provide ALPG kits for 2 wheeler customers at affordable price fully backed by sales and service support, to make it attractive for conversion from petrol and with large no of such conversions, enthuse 2 wheeler OEMs to enter this segment in a big way
Vision / Mission of the Project
2-Wheeler survey
• Comparable mileage vis a vis Petrol.• Running range of 800‐1000 Km/pm• In dual fuel model almost all the respondents operated there
bike on ALPG only, petrol was used only when ALPG was exhausted.
• Quite a few of the respondents owned more than 1 ALPG bike.
• Most of the respondents said there is lot of interest for ALPG bike.
• OEM’s ALPG Bike not available in the market.
Earlier scenario
• 2W kits cost > $ 190 per fitment• Un ergonomic design and positioning of tank
• Negligible customer awareness– 2W ALPG kits were perceived to be unauthorized
• Inadequate service facilities• Numerous unapproved/ illegal kits in market
LPG kits with:
Cost approx. $ 100
Performance comparable to petrol
Convenient & aesthetically acceptable design
Comply with all safety/statutory norms
Network of ALPG dispensing stations
Warranty / After sales service support
Customer Expectations
Right price of kit < $ 100 ??
Meeting demand for conversions
Development of RFCs, including training & certification
Marketing strategy, including customer awareness
Network expansion to meet additional demand
After sales service support
Business Challenges
Project Implementation
• Synergizing the strength of OMC’s, Retrofitters, Equipment manufacturers, RFC & Statutory authorities for a concerted effort in 2W Segment.
• Generating profits through volumes instead of high price build up at various levels of value chain.
• Liasoning with related government agencies for expediting vehicle registration.
• Generating awareness among target consumers at all integrated fuels OMC’s network.
• Building customer confidence through uniform communication, product quality / prices and after sales service.
Role played by IAC & OMCs
• Development of kits in co‐ordination with Kit & equipment manufacturers
• Expeditious Type approval from Agencies• Certification of 2W RFCs• Marketing Strategy • After sales service support
MISSION ACCOMPLISHED !!!
PRICE < $ 100
Sales Promotion
• Display and Demo of 2W ALPG at OMC RO’s• Demo bike offered by Local RFC was displayed at all
Targetted IAC ALDS.• Display of bike at outlet along with a Kiosk.• Information to customer through SMS / Banners /
Handouts / Posters / FM Jingles.• During demo campaign customers was explained
benefits of ALPG and offered free test ride of the bike to get a feel of the performance.
• RFC then took orders from customers interested in conversion.
Sales Promotion
Sales Promotion
Sales Promotion
Sales Promotion
Sales Promotion
Sales Promotion
oALDS infrastructure expansionoMaintaining price & qualityo Expansion of Kit Dealer Networko Expeditious RTO endorsement o Constant sales promotionso Market watch for unauthorized kits
Expansion & Sustainability of business
Total operating vehicles : 5.06 Cr.
Expected no of vehicles for conversion(> 1000 km/month : 50% of total) : 2.50 Cr.
Assuming only 10% conversion : 0.25 Cr.
Potential for retro-fitment : 25.0 Lacs
Additional Turnover : > ` 1000 Cr
Estimated ALPG consumption by this : 0.22 MMT p.a.segment.
Additional Turnover for OMC’s : > ` 1250 Cr
Benefit Statement
Thank You for your attention !!Thank You for your attention !!
Share the experience of Autogas 2W Ride