Fiat’s Natural-Gas Auto Sales Boom
For Fiat SpA (F), Italy’s austerity efforts have meant falling sales, stubborn losses and layoffs for thousands of workers. One business, though, has benefited mightily: the division that makes vehicles fueled by natural gas and propane.
Deliveries of those cars in Italy surged 90 percent to 114,226 vehicles through August, accounting for 11.6 percent of the market, compared with 4.9 percent a year ago. That’s good news for Fiat, which says it has 90 percent of the market for natural gas cars and 47 percent of the propane car market in its home country.
The boom takes some of the sting out of the 20 percent plunge in the Italian car market, to its lowest level in more than 30 years. Fiat is determined to export its advantage to the U.S., where regulatory changes are poised to boost interest. The spread of natural gas and propane vehicles is critical for Fiat, which has been developing the technology since the 1990s, because it doesn’t have an advanced electric-vehicle strategy.
Cars powered by compressed natural gas or propane (liquefied petroleum gas) have largely been a sideshow in the push for cleaner cars. Lacking the futuristic allure of hybrids and electric powertrains, the vehicles have failed to find widespread adoption even though they’re as much as 23 percent cleaner than gasoline engines.
A surge in pump prices for traditional fuels and belt- tightening spurred by Italy’s shrinking economy is changing that. Almost every auto manufacturer that sells in Europe has increased its offerings of natural gas-powered vehicles in Italy, the region’s biggest market for such cars.
‘Surf the Wave’
“The competition is higher as every carmaker is now trying to surf the wave,” said Daniele Chiari, Fiat’s head of European product planning. “We want to strengthen our leadership with new models,” like natural gas versions of the Panda city car and 500L compact wagon.
With auto sales tumbling in Italy, Fiat and other manufacturers of natural gas cars are luring customers with steep discounts and promises of 50 percent savings in fuel costs. Both Fiat and General Motors Co. (GM)’s Opel unit are offering rebates of as much as 5,000 euros ($6,570) on the cars to offset the additional costs of the engines and high-pressure fuel tanks. A natural gas Fiat Punto compact costs 2,450 euros more than the gasoline version — a premium of 18 percent.
Tax Burden
For strapped consumers, the advantages are compelling. Tanking up with 10 euros worth of fuel will take a gasoline- powered Fiat Punto about 96 kilometers (60 miles) versus 183 kilometers with propane and 283 kilometers with compressed natural gas, according to the Turin-based carmaker.
The prospect of such savings has made an impact on consumers like Alessandro Carmignola. The 36-year-old human resources manager reduced weekend trips to northern Italy’s Dolomite mountains after Prime Minister Mario Monti raised gasoline taxes to rein in debt. That pushed petrol prices to about $9.50 a gallon in some areas, making Italian fuel stations the costliest in Europe. Carmignola then made a drastic choice.
“Gasoline has simply became unaffordable, so I just sold my Audi A6 turbo for a gas-powered Ford Focus,” he said.
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