LPG plan a gas for Ford

FORD Australia chief Tom Gorman has welcomed plans by the Federal Government to offer subsidies of up to $2000 for vehicles using LPG.

The Government today announced it would offer a $1000 subsidy for new vehicles - and a $2000 subsidy for existing vehicles - that run on LPG under the government's new energy strategy, which also includes incentives to increase the use of ethanol and other alternative fuels.

Ford offers dedicated LPG vehicles in its XT, Futura and Fairmont sedans and XL, XLS, RTV and XR6 utes at a $1400 premium, and claims operating costs are similar to a four-cylinder Fiesta hatch. A "retrofit" for LPG costs between $2500 and $4000.

Ford is also looking at an LPG Territory, but there are technical issues with the tank installation.

"The engineering and packaging costs with LPG, as well as the spare wheel, is an issue with the Territory," Mr Gorman said.

LPG Fords are popular with fleets but Mr Gorman believes private buyers may increasingly move to the cheaper fuel, particular with government support.

"The private buyer is stepping into that segment," he said.

Ford also has no production constraints with LPG and can increase production to meet any increased demand as petrol prices bite.

"Our mix of LPG, as a percentage, is up threefold," he said, without aggressively marketing the product.

"What we realise now is that we really have a great opportunity on hand here and now the level of government support appears imminent we can step up and make it a more attractive opportunity for consumers." Mr Gorman said one issue that needed to be addressed with LPG was the number of filling stations.

Out of 6600 petrol stations nationally, only 3200 have LPG bowsers and most are in metropolitan areas.

In 2004 LPG Fords accounted for six per cent of overall Falcon sales.

Last year it was 11 per cent and year to date this year it is running at 21 per cent.

Mitsubishi offers a dual-fuel option on the 380. Holden is expected to offer a dual-fuel option on its new VE Commodore, and already offers LPG-fed utes. However, it the only car-maker to offer a dedicated LPG system.

Ford's dedicated LPG four-speed auto Falcon XT, called E-Gas, costs $37,280, $1400 more than the four-speed automatic XT. It develops 156kW at 5000rpm and 374Nm at 2750rpm.

Using petrol at $1.40 a litre as a guide, Ford claims the LPG Falcon can save up to $1096 a year for vehicles travelling 15,000km a year, recouping the initial purchase cost in 15 months.

However, LPG savings could be short-lived as the excise equalisation program - in which fuels such as LPG are exempt from the 38.5c a litre excise on petrol - is set to introduce a tax on these fuels from 2012.

Excise would be applied in annual increments of 2.5c a litre until it reached a ceiling of 12.5c a litre by 2015.

In an effort to increase the take-up of ethanol, the Government is also considering subsidising the cost of building storage facilities at service stations for E10 blended fuel.

"There's a lot of talk about ethanol but we've gotten over that issue with E10," said Mr Gorman. Like Holden's Commodore, every Ford sold in Australia is E10-compatible.

"I don't believe that Australia is a low-cost producer of ethanol so I don't think you're going to see ethanol as much as you will LPG in terms of the path forward." The Federal Government is under increasing pressure from its backbench for find relief anywhere it can over rising petrol prices, with prices expected to surge to more than $1.80 a litre, according to some motoring groups.

Last week global oil prices passed $US77 a barrel for the second time in history.

With LPG selling at half the price of petrol, the number of cars converting to LPG has doubled in the first six months of the year compared with the same period last year.

According to LPG Australia 5000 owners a month are making the switch and some 550,000 cars now run on LPG, up from 500,000 a year ago.

One Ford prepared earlier


FORD'S E-Gas Falcon made it from Melbourne to Perth last week on just $199 of fuel.

In a stroke of luck last week, Ford launched its LPG round-Australia challenge just as the prospect of $1000 Federal Government rebates on LPG cars hit the news.

Ford spokesperson, Sinead McAlary, said the LPG round-Australia challenge was designed to highlight the benefits of a dedicated LPG Falcon, without losing the practicality or boot space of a petrol-engined version, including the retention of the split-fold facility.

Ford expects the LPG Falcon to do a circuit of Australia on just $1000 of fuel, covering more than 13,000km.

It has teamed up its race car drivers to put the E-Gas Falcon through its paces.

Ford president, Tom Gorman, said fuel economy was a critical element in the new car buying process and the E-Gas Falcon had grown its share of sales since launch in 1999.

"Our dedicated LPG - or E-Gas Falcon - offers all the power and comfort of a large family sedan with the fuel costs of a small car," he said.

"To showcase the advantages of dedicated LPG, we have set ourselves a unique challenge of travelling around the country for around $1000 in the E-Gas Falcon to demonstrate the work our designers and engineers have undertaken." Due to take 23 days, the trip is following a route through Geelong, across to Adelaide, over the Nullarbor, up to Broome, across to Kununurra and Darwin, down to Tennant Creek, over to Townsville and Brisbane to Tamworth and into Sydney, then through Canberra and back to Melbourne.

Apart from cost savings, a US Department of Energy fuel study has shown that LPG has almost 20 per cent less global warming potential over its full lifecycle than petrol when all greenhouse gas emissions are considered during the production and use of both fuels.