India Mahindra launches CNG pick-up as fuel costs bite

MUMBAI, July 17 (Reuters) - Mahindra & Mahindra Ltd (MAHM.BO), India's top utility vehicle maker, on Thursday launched a CNG variant of its popular Bolero pick-up truck, the latest vehicle maker attempting to get around high fuel costs.

Mahindra, which is building a hybrid diesel variant of its Scorpio sport utility, said the Bolero Pik-Up is the first CNG variant of a large pickup model.

It also has CNG variants of the Alfa in the small three-wheeler and Champion CNG in the large three-wheeler cargo category.

"CNG vehicles are known for very low operating cost (and) the government's increasing focus on developing CNG as a viable fuel will result in rapid growth of this segment," Mahindra said.

"Moreover, the popularity of CNG will increase not only due to rising fuel prices but also because of availability of CNG in major cities across the country." India last month raised petrol and diesel prices by an average 10 percent, the biggest hike this decade. The increase, combined with rising interest rates, have hit demand, particularly for motorbikes and commercial vehicles.

Auto makers are therefore stepping up the pace of developing more fuel-efficient vehicles.

Top car maker Maruti Suzuki India Ltd (MRTI.BO) recently launched a dual CNG variant of its oldest model, the mini 800.

Hyundai (005380.KS) has CNG variants of its Santro hatchback and Accent sedan, while Bajaj Auto (BAJA.BO) is testing a commercially viable LPG motorbike.

Hyundai, the No. 2 car maker in India, also last month offered fuel vouchers worth 2,700 rupees ($63) with purchases of the Santro and the i10. ($1=42.8 rupees) (Reporting by Rina Chandran; Editing by Mark Williams)