by Flexfuel vehicles, also known as flexible-fuel vehicles, are designed or modified to run on more than one fuel, usually gasoline blended with either ethanol or methanol fuel. Ethanol flexible-fuel vehicles can use E85 fuel, which is up to 85% denatured ethanol and 15% gasoline. Growing concerns regarding environmental pollution and rising fuel prices have boosted demand for more fuel-efficient and eco-friendly vehicles in the country. Flexfuel vehicles offer significant benefits of reduced vehicular emissions and lesser dependency on imported fuel. The growing push for electric and alternate fuel vehicles by the Indian government through initiatives like FAME India scheme is expected to drive adoption of flexfuel cars in the coming years.
The global India Flexfuel Cars Market is estimated to be valued at US$ 611.8 Mn in 2023 and is expected to exhibit a CAGR of 15.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics
The growing adoption of alternative fuel vehicles in India coupled with government initiatives to promote EVs is expected to drive demand for flexfuel cars over the forecast period. The FAME India scheme aims to encourage adoption of electric and hybrid vehicles including flexfuel vehicles in the country. It offers subsidies to buyers as well as creates necessary infrastructure to ease transition to green mobility. While ethanol pumps are increasing steadily, lack of ethanol blending and infrastructure currently remains a challenge limiting wider acceptance of flexfuel technology. However, with growing focus on reducing vehicular emissions and energy security, investments in setting up ethanol pumps and distribution networks are expected to rise promoting popularity of flexfuel cars.
Segment Analysis
The India flexfuel cars market is dominated by the compact segment which accounts for over 35% share. Maruti Suzuki dominates this segment with popular models like the Baleno, Swift, Dzire etc. which come with flexfuel technology. The compact segment is the most popular category in the overall Indian passenger vehicle market and hence flexfuel versions of these cars are in high demand as consumers prefer multi-fuel technology in affordable sedans and hatchbacks.
PEST Analysis
Political: The Indian government has implemented various policies to promote use of biofuels and flexfuel vehicles. It has announced certain tax benefits for automobile manufacturers providing flexfuel options. This is helping boost adoption.
Economic: Rising income levels are enabling more consumers to opt for flexfuel vehicles as their second or family car. Lower fuel prices also make flex-fuel cars an affordable choice. The falling EV battery costs are also supporting demand.
Social: With growing awareness about vehicular pollution, customers prefer flexfuel cars as an environmentally friendly alternative to regular gasoline vehicles. The flexfuel technology option offers flexibility during times of fluctuating fuel prices.
Technological: Most leading automakers have developed flexfuel engines and technologies which allow running on different blending ratios of gasoline and bioethanol. Features like real-time flex fuel selection have improved viability.
Key Takeaways
The India Flexfuel Cars Market Demand is projected to grow at an impressive CAGR of over 15% during the forecast period of 2023-2030. This can be attributed to growing environmental awareness, government mandates and support programs as well as improved availability of flex fuel stations across different regions of the country.
Regional analysis
The southern region of India accounts for around 30% market share led by states like Karnataka and Tamil Nadu where the availability of sugarcane enables sizable ethanol production. Maharashtra and Gujarat are other high-potential markets due to presence of agro-based industries and flexfuel availability.
Key players
Key players operating in the India flexfuel cars market are Maruti Suzuki, Hyundai, Tata Motors, Nissan, Renault, Mahindra & Mahindra, Toyota, Honda, Ford, Volkswagen. Maruti Suzuki is currently the dominant player with its popular compact models providing flexfuel drivetrain options. Hyundai and Mahindra are other major fleet customer-focused brands aggressively promoting their flexfuel SUVs and pick-ups.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.
