Natural gas vehicle (NGV) production and sales fell 6.5% last year as gains in the heavy- and medium-duty segments were offset in declines in the light-duty vehicle segment, trade association NGVAmerica said Thursday. Last year, NGV production/sales totaled just over 18,000 vehicles.

The heavy-duty market was up 30% over 2013 and the medium-duty market was up 24%. But the light-duty segment fell 34% from 2013. The decline was mostly related to a drop in orders from the gas and oil exploration and production (E&P) sector, NGVAmerica said. The light-duty segment dropped by nearly 3,500 units compared to 2013.

Production and sales are expected to hold steady or improve this year, the group said.

The “dramatic drop in the price of oil” apparently crimped the NGV budgets of oil and gas producers, NGVAmerica said. “However, significant growth occurred in both the medium- and heavy-duty market segments as a result of the still favorable economics these higher-fuel use applications generate,” the group said.

With improvement in oil prices, the value proposition of NGVs will improve, and sales growth is expected to accelerate.

“The 2014 NGV Production/Sales Report shows significant growth in key market segments and a healthy overall NGV marketplace given the headwinds of low oil prices we faced last year,” said NGVAmerica President Matthew Godlewski. “The data we collected continue to show that clean-burning natural gas has a strong future as an advanced transportation fuel.”

While 2014 saw some utility orders for NGVs, many utilities had “loaded up” on NGV orders in 2012 and 2013, and thus the orders from this segment were down compared to the previous two years, NGVAmerica said. “The municipal segment did not decline as much as other segments. This is likely due to municipalities committing to purchases based on sustainability goals rather than pure economics.

“While AT&T and several other large commercial accounts took delivery of NGVs in 2014, they achieved their target deployment goals earlier in the year. Miscellaneous small orders from small commercial accounts were not finalized as gasoline prices fell, further contributing to the decline in commercial segment orders.”

The medium-duty market increase was due to a mix of shuttles, utility cab-chassis orders, and several good-size commercial box truck cab-over-engine (COE) orders, the association said. “While fuel use in many of these city-based delivery and passenger transport applications is less than over-the-road applications, medium-duty vehicles enjoy a lower up-fit cost and longer service life, which provides for significant life-cycle savings. This market is poised for continued growth as more platforms become available and as incremental price premiums drop, strengthening the overall economic value proposition.”

The heavy-duty segment benefited from market drivers in three distinct areas: continued growth in refuse truck sales and strong transit bus orders, the first full-year availability of a new engine platform, and continued growth in dual-fuel systems, NGVAmerica said.

“Refuse truck sales continued to capture more than 50% of the market as the industry’s large fleets — including Waste Management, Republic Services and Progressive Waste Solutions — continued to transition to natural gas. Many medium-size companies also began to transition to natural gas as a way of staying competitive with their larger competitors. Natural gas transit bus orders were especially strong in 2014 as many existing agencies began replacing original natural gas units purchased in the late 1990s and early 2000s. Several new agencies also began transitioning to natural gas.”