LPG industry lights the pilot

AUSTRALIA’S LPG industry has hit out at car-makers for not importing gas-fed vehicles to ignite interest in the fuel.

Gas Energy Australia chief Mike Carmody said the industry was frustrated that brands such as Kia and Renault were not importing LPG vehicles sold in other markets.

He said that, if the manufacturers would not import them, the LPG industry needed persuade them to bring them in.

“We have to get over the current paradigm of Holden and Falcon and just say, ‘OK, we’ve been there, what’s the next generation?’ ” Mr Carmody said.

“To get there, the LPG industry has to get out and strategically work with select dealerships in Australia to create the import connection.” He said dealer chains that were importing Chinese cars had shown how it was done.

“It’s the same as the dealers did with Chinese vehicles, where they went to an exporter in China, had commitments from certain dealerships in Australia, and all of a sudden, you’ve got (car dealers) selling a Chery vehicle.

“We need similar strategic thinking, where we go to national dealerships and then stitch up liaisons with an exporter of these LPG and hybrid-LPG vehicles,” Mr Carmody said.

“My advice to the industry has been, don’t just cry into our beer over the Holden and Falcon think a little more strategically. Think about an offering we could bring into the market, and think about playing a facilitation role between an exporter of these vehicles and a number of key dealerships.” Mr Carmody was speaking at the launch of an industry-backed marketing campaign in Melbourne last night which the group hopes will reignite interest in the fuel.

Gas Energy Australia, the peak association representing automotive liquefied petroleum gas interests, has prepared marketing material and launched a dedicated website to help get the message across to prospective customers.

The campaign was funded after the group appealed to LPG suppliers and workshops that convert vehicles to run on the gas for financial support.

Gas Energy Australia chief Mike Carmody admitted that the automotive LPG campaign would not have a big budget, but he said last night after the launch that it was, at least, a start to remedying the situation.

The industry has taken a beating since the 2008 global financial crisis savaged the demand for large cars, the vehicles most often converted from petrol to LPG or dual-fuel systems.

Left: Gas Energy Australia chief Mike Carmody

Conversions of vehicles to LPG were down more than 70 per cent from 2008 to 2011 and sales of new cars that use LPG were down almost 80 per cent.

The trend has continued into this year, with sales of new LPG vehicles in the passenger and light commercial segments dropping 55 per cent to 312 units in the first two months of the year.

By comparison, sales of petrol-electric hybrid cars in those segments have risen 20 per cent to 1431 units while sales of diesel vehicles rose 24 per cent to 54,726 units.

“Unless we start getting our value proposition – our product, our fuel and our service – out to the consumer, then we are going to do it very tough,” Mr Carmody told an industry gathering in Melbourne yesterday.

He said several unsuccessful attempts had been made in the past to organise a concerted effort to promote LPG, but it had been a struggle to muster support from the disparate industry.

“Tonight marks the start of the fightback,” he said.

“It’s been some years coming, whereby the association has moved into the broader, strategic promotion of our product out there in the community, marketing to the consumer.” “This is a very small step against what I believe will be a fairly monumental shift in the industry, and the association, over the next few years,” “At the end of the day, when it comes to autogas (for cars) or homegas (for households), without demand not a lot else matters.” The campaign, using the slogan “safety and savings”, will run for four months but, given the limited budget, it will not include any television ads.

The website at www.autogas.org.au will host testimonials of the advantages of LPG, and will include a ready reckoner so drivers can calculate how much money they could save if they converted to LPG.

Mr Carmody said Gas Energy Australia was holding talks with some of the larger stakeholders in the LPG market to see whether a supplementary budget could be raised to push the message harder.

“Autogas is the most affordable fuel on the motoring market,” he said.

“Typically it is around half the cost of unleaded petrol (and is available) at over 3700 service stations across Australia.

“It was the lowest priced fuel throughout 2012 – and is still the most affordable at the pump.” One example cited by Gas Energy Australia shows that a driver who previously spent $120 a week on petrol now drives an autogas car with a weekly fuel bill has dropped to $45.

Mr Carmody said marketing materials would help vehicle converters to get their facts straight and make the proposition clear to the customers.

He said random sampling by Gas Energy Australia while developing the campaign had made some disconcerting discoveries.

Calls to more than 30 LPG conversion businesses seeking quotes to convert a Falcon to LPG – most of them not members of the association – ranged from $2300 to more than $6000.

“The amount of disinformation in the market was staggering,” Mr Carmody said.

“Many people who took the calls did not know what they were talking about.” That’s why a key part of the campaign is the availability of a “tool kit” for converters. This contains a lot of information about LPG prices, the conversion process and other facts that a potential customer might want to know.

“Using the tool kit will ensure that everybody in the industry is singing from the same songsheet and that customers are given the correct information,” Mr Carmody said.

After the launch, Mr Carmody said he was frustrated that carmakers like Kia and Renault were not importing LPG cars they sell in other markets.

He said there were electric/LPG hybrid small cars available in other markets that would excite a lot more interest in LPG if they were available here.

He said he planned to hold talks with some national dealer groups to see whether it would be possible to import some of these models.

In the last few months Gas Energy Australia was formed out of the old LPG Australia. The association now also has responsibility for liquefied natural gas (LNG) and compressed natural gas (CNG).