At the Motor Expo, car buyers are being treated to special offers, such as special down payments, low interest rates or an extended instalment period. It seems that a pessimistic mood has sunk in deep among Thai consumers, who have become more cautious with their spending.

All of this could convince many that the car market is shrinking, that not many new cars are appearing on the streets.However, new cars do keep coming onto the streets. Thanachart Bank, a key player in the auto hire-purchase market, estimates that this year a total of 720,000 vehicles will have been sold, an increase over the 600,000 sold last year.

The bank also predicts that next year will see a growth rate of 3 per cent, equivalent to 21,600 units. In all, 741,600 vehicles are expected to hit local streets next year.

Given these figures, the car market clearly continues to grow. So why are car companies complaining about the "fierce competition"?

Certainly, not all auto-makers have benefited from the growing market, which is notably dominated by two car companies: Toyota and Isuzu. October sales figures show these two companies controlling a combined 70-per-cent market share, with the rest split by tens of other companies, including Honda, Nissan, Mazda, Chevrolet, Mercedes Benz, BMW and Land Rover.

Sources in the know say most European car companies cannot even hope to sell more than 10,000 units for this year. So would that justify the huge investment they are pouring into showrooms to turn them into attractive destinations?

At Thanachart Bank alone, 80 per cent of all cars bought with loans it issues are Toyotas, Isuzus, Hondas and Nissans. That says a lot about who controls the market.

achara_d@nationgroup.com