Diesel dominating LPG

Buyers aren't buying the argument that LPG makes more sense in Australia than Diesel

LPG is losing the alternative fuels war.

The gas that's been fuelling taxis for decades and is being flogged off to China by the shipload, cannot compete with diesel as an alternative to petrol.

According to VFACTS, 3082 new cars games sold in Australia last year were categorised as LPG-fuelled. In 2010 LPG-equipped cars numbered 7954 units sold, suggesting that Ford's temporary exile from that sector of the market in anticipation of the EcoLPI Falcon has been costly, both to Ford and the market perception that LPG is a serious alternative to petrol or diesel. Holden will shortly introduce a dedicated LPG variant of the Commodore, but other than the two local manufacturers mentioned, there's no OEM support for LPG in the new-car market.

Hyundai and Kia have backed away from bringing LPG-fuelled models to Australia, on the grounds that our LPG mix of propane and butane is not compatible with the home market's (South Korea).

According to Tim Reardon, the FCAI's Director of Government Policy, diesel has left LPG in its wake. In just five years sales of diesel passenger cars have risen from 1.7 per cent (2006) to 15 per cent last year. Total diesel sales last year amounted to 27.1 per cent of the market for vehicles up to 3.5 tonne GVM, including commercials and SUVs. Petrol holds the lion's share at 72.5 and LPG accounts for the balance, around 0.3 per cent.

"In 2006 there were the same number of diesel [passenger] vehicles as there were LPG vehicles," Reardon told motoring.com.au. The FCAI exec says that the vast majority of light commercial vehicles are diesel-powered these days.

"[LCVs] are basically 100 per cent diesel, other than Falcon and Commodore utes," he said. "That wasn't the case five years ago either; that's been fairly dramatic growth, but we've maxed out diesel penetration in light commercials now."

Reardon argues the case for LPG and finds it difficult to explain why the gaseous fuel is so hard to market to either private buyers or fleets.

"You get the same level of CO2 emission reductions — potentially; you get the fuel price saving..." he said.

Reardon has no specific answers to offer, but the matter seems to be a question of convenience. Even in the Falcon EcoLPI, currently the state of the art for LPG fuel delivery systems in this country, there may be a slight delay before the engine fires up. Add to that the loss of boot space as a compromise forced upon the owner who also wants a full-size spare and you have two reasons right there for buyers to opt for diesels instead.

Can LPG recover and grow some market share? Holden is about to launch its single-fuel LPG Commodore — the official media event is scheduled for February 21 — but like the Falcon the Commodore's fan base will be limited to those who want a large sedan (and wagon in Holden's case) or car-based utilities.

And the two local manufacturers are having an each way bet that may impact on LPG's viability.  Holden can provide E85-compliant flex fuel engines as its alternative to petrol dependency and Ford will shortly release its EcoBoost four-cylinder Falcon, which is yet another iron in the fire.

So the future looks bleak for LPG in new cars — and when Mercedes-Benz can see an end in sight for diesel, have we backed the wrong horse?