Eco-car may leave other models biting the dust

Initially, the most popular cars were those with 1,300cc engines, but larger 1,600cc models later dominated the car market.

However, after 1,500cc cars such as the Toyota Vios and Honda City were introduced in Thailand in the last decade, they quickly became the top sellers in the car market.

Now, with even smaller cars being introduced – we’re talking about eco-cars – it is clear that competition in the car market has changed. Major auto-makers have launched eco-cars – Nissan (March and Almera), Honda (Brio), Mitsubishi (Mirage) and Suzuki (Swift) – and each company has claimed very high sales figures.

Before they were introduced, there was discussion that the segment that would be most affected and lose market share to the eco-car would be the pickup truck. Many believed that the market share of pickup trucks would shrink to less than 50 per cent. 

In the end, it looks like pickup trucks will not be the vehicle that has the largest market share here. And sales figures in the past 3-4 years point in that direction. Although sales of pickup trucks make up more than half of the vehicle market, there has not been much growth in the segment. On the contrary, the market share of passenger cars has been growing significantly.

No matter which type of vehicle becomes the bestseller, the segment that will be most affected by the presence of the eco-car and other small, fuel-efficient cars is the compact car market consisting of the Toyota Altis, the Honda Civic and the Mazda3.

The reason that supports this trend is the slow movement in this segment as well as the poor market response. This has happened despite several auto-makers launching new models such as the Mitsubishi Lancer EX, the Chevrolet Cruze, the Mazda3 and the Ford Focus. Meanwhile, market leaders like Toyota and Honda have adopted a low profile, and even Nissan, which has introduced a large number of new models, has not achieved the same level of popularity in the segment as its older model the Sunny Neo had done in the past.

There are several reasons for the decline of the compact car segment, which includes 1,600cc- 1,800cc (and 2,000cc in certain models) engines. A modern lifestyle that is more individually independent as well as smaller families are contributing to the increasing popularity of small cars. Many young people also live in apartments and condominiums rather than single houses or townhouses, which means they have limited parking space. Many also increasingly use public transport such as the Skytrain and choose to fly rather than drive when having to travel long distances.

Meanwhile, those who still live the big family life and need a trustworthy vehicle are stepping up to a larger segment, with popular models being the Toyota Camry, Honda Accord and Nissan Teana. These midsized cars offer more space as well as comfort and convenience, and is attractively priced especially when compared to sub-compact cars with the same engine size. For example, the 2-litre Corolla Altis costs almost as much as the Camry 2-litre version. 

Many are also going in for double-cab pickups that are available in both 2WD and 4WD versions and are priced at the same level but have much higher versatility. Then there are those who choose PPVs (pickup passenger vehicles) when they need more space as well as high versatility.

That’s why companies that sell these vehicles need to adjust the selling point of their products so that they can survive. The most popular is to offer bi-fuel engines such CNG models or E85-compatible engines like those offered in the Honda Civic and Lancer EX.

We will have to watch and see whether compact cars that once ruled the market will be able to make a return to the No 1 position or slowly shrink and fade away. In the meantime, it would also be interesting to watch which segments will grow or decline as the auto market reaches new heights.