Managing director Pithep Chantarasereekul said many companies would cut back on expenses during the economic slow-down by renting cars instead of buying them. In this way, they will know their costs precisely. So, while car-sales businesses are likely to record negative growth this year, Kcar will grow.

At present, Kcar is the country's third-largest car rent and lease firm. If it grows by 15 per cent this year, it will have 5,000 cars.

"It is difficult to forecast whether the economy will improve or not, but I don't think it will get much worse. If the economy recovers, our business will grow at a higher rate than the projection, because of our wide customer base," Pithep said.

Private customers account for 70 per cent of the company's business. The rest comes from public-sector organisations like TOT.

Pithep said lower interest rates had helped reduce the company's cost of funds but that it was planning to issue bonds sometime next year to lower that cost further.

Amid the fierce competition sparked by the economic downturn, Kcar has set up a sales team to educate customers about the business benefits of renting cars rather than buying them. It has also reduced its costs and boosted its income. Reserved cars are being fully used to generate more revenues, and the company is increasing its sales of used cars, he said.

"I believe the used car business will continue to grow significantly next year as we have many cars in our portfolio," Pithep said, adding that Kcar has also developed its own computer programme to evaluate data more precisely and to help control costs.

"I'll be able to see the detailed costs of each project, so I can control costs efficiently. Anyone who can control costs has an advantage over others," he said.

Pithep said competition in the rental car business had been very strong, because customers were sensitive to prices. However, along with a pricing strategy, Kcar has provided after-sales service that satisfies customers' needs, including maintenance and car replacement.

"Some customers are not concerned only with prices, but also consider the value of the service," he said. "Some companies offer low prices with few cars for replacement and bad service."

The company has recently been reorganised, with the creation of an after-sales unit to add to its front office and business-support units. Each unit works independently.

Pithep said the company also planned to solve a free-float problem in the medium term, because its stocks floating on the market are not sufficiently liquid.

Kcar recorded first-quarter revenues of Bt282 million, up nearly 30 per cent year on year.

Anoma Srisukkasem

The Nation