AM Online

LPG future 'uncertain'

The market for cars powered by liquified petroleum gas is set to remain in the doldrums unless the Government increases its support for the market.

Despite the continued availability of subsidies designed to encourage the purchase of LPG-powered cars, sales remain sluggish and their residual values are still weak.

According to Glass's, without further commitment to support LPG on the part of Government as well as vehicle manufacturers and fuel providers, there is little prospect of any improvement in the sales of LPG cars, or in the performance of these vehicles on the used car market.

There is an estimated 107,000 LPG-powered vehicles registered in the UK, representing just 0.4 per cent of the total number of cars on UK roads.

Principle factors holding back the market remain the availability of fuel (there are still only around 1,400 LPG sites); the improvement in diesel engines and a pro-diesel company car tax policy; limited choice of LPG models; continuing safety concerns about the use of the gas and standard of aftermarket conversions and finally the reduction in bootspace once the tank is fitted.

The majority of new LPG converted cars have so far been going to local and national government fleets.

This is having a negative impact on the residual values of many LPG vehicles entering the used car market.

Jeff Paterson, senior car editor at Glass's, says: "The outcome has been that many of the used examples have either been low specified versions in below average condition, or have had excessive mileages. As far as residual values are concerned, LPG cars don't generally benefit from any used car price premium over their petrol or diesel counterparts."

According to Glass's, current initiatives in support of LPG are unlikely to lead to a growth in registrations . "In many ways LPG offers a double-edged sword," adds Paterson. "The more drivers that take up LPG, the more revenues from other fuels are likely to become eroded, and as a result the government would inevitably need to raise duty elsewhere to offset any losses.

"On the other hand, so long as take-up remains low, then fuel companies and car manufacturers will further ease back on development programmes, which will in turn increase difficulties in finding a good choice of models and the sites to fill them up."

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