Sales of liquefied petroleum gas (LPG) small commercial vehicles are thriving despite high fuel prices. These vehicles are leading the shrinking LPG market by addressing the winter starting issues associated with LPG vehicles.
According to Kaizu Data Research Institute, as of September this year, 91,960 new LPG vehicles were registered, with small commercial vehicles accounting for 60,880 units, or 66.2% of the total.
The share of LPG small commercial vehicles remained in the 20% range until 2023 but surged to over 60% in 2024, establishing itself as the market's core segment. The number of new registrations increased from 14,493 in 2023 to 88,595 last year, more than a sixfold rise.
This shift has been influenced by the discontinuation of diesel models for Hyundai's Porter II and Kia's Bongo III. In response to stricter emissions regulations at the end of 2023, Hyundai Motor Group halted production of the diesel models and launched LPG turbo variants. Demand for diesel small trucks has shifted to LPG vehicles.
The economic advantages of LPG small commercial vehicles also play a significant role. The Porter II LPG features a next-generation direct injection (LPDi) engine, enhancing power while reducing fuel costs compared to the diesel model. According to the Korea LPG Association, the annual fuel cost for the Porter II LPG, based on 18,000 kilometers of driving, is approximately 3.17 million won, which is 600,000 won less than comparable diesel models.
In contrast to the growth of small commercial vehicles, the overall LPG vehicle market is experiencing a slight contraction. Last year, new registrations of LPG vehicles totaled 136,506, a 15.3% decrease from the projected 161,118 for 2024. The decline in passenger vehicle sales has directly impacted this trend.
New registrations of LPG passenger vehicles last year were 47,911, down 54.4% from 105,068 in 2020. From January to September this year, only 31,079 new registrations occurred. Although restrictions on general public purchases were lifted in 2019, sales have been on a long-term decline. Additionally, the rising popularity of hybrid vehicles is further narrowing the market for LPG passenger vehicles.
An industry insider noted, "While LPG vehicles have become an alternative following the discontinuation of diesel models in small commercial vehicles, the overall market is shrinking. For the passenger vehicle market to recover, there needs to be a broader selection of new models."
* This article has been translated by AI.
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