Frost & Sullivan has released a new analysis suggesting that the alternative fuel vehicle market is poised for a spike in both North America and Europe.

The company's "Executive Analysis of the European and North American LPG and CNG Original Equipment Market" forecasts a total of 900,000 unit sales in the European market and nearly 250,000 in unit sales in the North American market by 2018.

"The demand for low-cost emission reduction technologies has given a significant boost to the alternate fuel market," says Frost & Sullivan research analyst Priyank Aggarwal. "A noticeable trend among upcoming OEM models is that of chassis architectures and engines being designed to ensure alternate fuel compatibility. This will support easy transition, even as alternate fuel infrastructure improves across Europe and North America."

Frost & Sullivan says the alternative fuel vehicle market in Europe is already growing, with Italy and France trading over 300,000 vehicles annually. Liquefied petroleum gas (LPG) is expected to be the predominate fuel choice over the next four or five years, the firm notes.

In North America, fleet operators are beginning to see the advantages of alternative fuels, "since running costs are a major factor, and fleet owners stand to benefit from up to 50 percent in savings, along with an improvement of over 25 percent in terms of emissions," the analysis suggests. Frost & Sullivan notes, however, that important legislative support is currently lacking.

"Insufficient infrastructure, high cost of development and ease of adoption of alternate fuel vehicles represent the main obstacles to market development," Aggarwal says. "Competitive pressure from other alternate powertrain technologies also poses a major threat to the alternate fuel industry."