Is Westport About to Hit it Big in India?

Westport Innovations unveils two new engine platforms.

| More on:
The Motley Fool

Westport Innovations (TSX:WPT)(NASDAQ:WPRT), a leader in advanced natural gas engines and vehicles, has just announced a new partnership with Indian manufacturer Tata. Under the agreement, Westport will provide its technology and components to Tata, which will roll out the two new engines in the rapidly expanding Indian market.

Tata is India’s largest automobile manufacturer. It is also the world’s fifth largest truck manufacturer and fourth largest bus manufacturer, totaling $34 billion in annual revenues. This gives Westport the best option available to make a noticeable push into India.

The 5L diesel natural gas hybrid

The first engine is a next generation 5L dual-source powered by Westport’s GEMDi technology. Designed for buses and medium-duty trucks, this engine combines conventional diesel technology with natural gas, without a loss in power, allowing companies to use both sources in a country heavily dependent on imported oil. This will allow users to make a gradual shift to natural gas as the infrastructure is built up — the engine will also have the ability operate without natural gas. Westport is advertising the typical use of the engine to be 60% natural gas and 40% diesel.

The 3.8L turbo spark

The second engine announced is a 3.8L spark ignited turbocharged natural gas engine featuring the Westport WP580 Engine Management System. This system has a broader range of configurations and can be used in many types of smaller vehicles.

This is only the first engine that will use Westport’s WP580 EMS as a 5.7L engine, which will target the medium duty market. It is also slated to be introduced this year.

Indian potential

The biggest draw for this deal is the size of the available market in India, which is the largest bus and truck market in the world. Projected 2014 sales nationwide for heavy-duty trucks and buses are expected to reach 289,000 units, and is projected to climb to 478,00 a year by 2022.

In the medium-duty natural gas bus and truck category, sales are expected to be 12,000 units in 2014, and climb to 60,000 units by 2022. In the light-duty category, which is the target of the 3.8L WP580 EMS, Navigant research projects that the market opportunity in 2014 is 204,000 units.

Foolish bottom line

With these new advances in technology and this partnership with Tata, Westport has positioned itself very well. In India the idea of investing in natural gas alternatives has a huge potential upside, as it is one of the world’s largest importers of oil, and the fourth largest energy consumer worldwide.

The growth of natural gas is inevitable as the nation is looking to boost production by 66% over the next three years. With a growing supply and infrastructure, India could prove to be an excellent opportunity for Westport.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway does not own any shares in the companies mentioned. The Motley Fool owns shares of Westport Innovations.

More on Investing

Stock analysts were once excited about construction company Aecon as an investment.
Coronavirus

Bull or Bear: Why Analysts Changed Their Tune on Aecon Stock

Analysts had been champing at the bit for the construction company, but the tides have turned.

Read more »

Specialty Brands faces higher raw materials costs.
Dividend Stocks

What’s Next for Premium Brands Stock?

Shares of the specialty food production and distribution company have fallen about 25% since last October.

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Dividend Stocks

2 Interesting Buys in Any Market

Here are two intriguing buys in any market climate that offer defensive appeal as well as growth and income earning…

Read more »

Bank sign on traditional europe building facade
Bank Stocks

Should You Buy Bank Stocks Now?

Canadian bank stocks are getting cheap. Is this the right time to buy?

Read more »

stock data
Stocks for Beginners

2 Reliable Stocks Beginners Can Buy Amid the Market Selloff

As the broader market turmoil continues, new investors can buy these two reliable dividend stocks to get good returns on…

Read more »

Biotech stocks can be good yet risky investments.
Coronavirus

Is Bellus Health Stock Still a Buy After 30% Earnings Jump?

The biotech continues to make progress on obtaining FDA approval for its chronic-cough therapy.

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

TFSA Investors: 3 TSX Stocks for Tax-Free Passive Income

These Canadian corporations have strong visibility over future earnings and dividend payouts.

Read more »

Piggy bank next to a financial report
Investing

Do You Have Cash Sitting in Your TFSA? Now Is a Great Time to Buy Stocks

If you have cash in your TFSA that you're looking to invest, now is a great time to buy high-quality…

Read more »