The hybrid war

The losers will of course have to wait for four years to get another chance, and in the mean time they have to train hard to build up expertise and body strength, as well as participate in competitions on a continuous basis to remain competitive. 

Some of those who didn’t bag a medal and feel they still won’t win one next time around may switch to events in which they think they will have more chance. 

Business is like sports in many ways because you need to know the strengths and weaknesses of yourself as well as your rivals. You must pick a business that you are strong in or where your rivals are weak. You must also find new markets that are not dominated by anyone. But also bear in mind that there is no business theory that is 100 per cent effective. 

The Thai automobile market has enjoyed tremendous growth for a number of decades, thanks to diesel pickup trucks. Meanwhile, the passenger car market that grew the most was the 1,300cc segment, which later shifted towards the 1,500-1,600cc segment. Today, the majority of sales is expected to shift again, this time towards city cars or eco-cars. 

In the pickup market, the model that enjoyed the highest growth was the double-cab one. More gasoline-powered pickup trucks are also being sold (both gasoline and gasoline/CNG variants). 

The availability of gasoline-powered pickups means that auto companies do not trust the government’s energy policies. 

A large number of pickup manufacturers including Toyota and Mitsubishi are offering gasoline/CNG models as an additional choice for customers. If growth in this market continues, commercial vehicle giant Isuzu, which is a diesel specialist, might even consider developing a gasoline/CNG engine for its line-up in Thailand. 

Meanwhile, in terms of hybrid-powered passenger cars, Toyota is considered the largest player in the market with cars like the Camry Hybrid and Prius, as well as a range of hybrid models from Lexus. 

Today, it is normal for us to see hybrid vehicles on the roads, but virtually all of them are from Toyota and Lexus. 

Manufacturers that offer hybrid vehicles in other parts of the world are also interested in breaking into this market, especially Honda that introduced the Civic Hybrid for sale in Thailand many years ago. The carmaker also brought in its Honda Insight hybrid for Thai journalists to test drive many times. 

But to offer a hybrid vehicle at the same level as the Camry Hybrid and Prius is not be easy due to Toyota’s strength in this market. 

At the Bangkok Motor Show, Honda launched the CR-Z hybrid, priced at almost Bt2 million, but did not carry out a host of marketing promotions. Honda just wants to let its fans know that it has hybrid vehicles as well. 

On the other hand, the model that is bring heavily promoted is the Jazz Hybrid, which Honda says is affordable to everyone due to its highly attractive price tag of less than Bt800,000. Moreover, those who purchase the Jazz Hybrid under the First Car Buyer Programme will get cash rebates form the Excise Department, meaning that each Jazz Hybrid will cost less than Bt700,000. 

Apart from being affordable, the Jazz Hybrid belongs to one of the largest market segments – the subcompact market. 

The entry of Honda into the sub-compact market with a hybrid model is a highly interesting strategy. It does not need much investment to promote the advantages of hybrid technology, since the market leader has done that over the past few years. Now, consumers all know what hybrid technology is. 

Young and trendy consumers, who may not have high earnings yet but know about hybrid technology, may not be able to afford a Prius or Camry Hybrid, which are priced at more than Bt1 million. The Jazz Hybrid, on the other hand, would be the ideal answer as they can afford it plus show others they care about the environment. 

However, the biggest problem for hybrid vehicles in Thailand is maintenance and repair, both in terms of finding a garage or service centre for repairs as well as shouldering the repair costs. 

That’s why hybrid owners in Thailand typically have other luxury vehicles. For example, an owner of a Porsche Cayenne Hybrid would worry if he has to wait many days for repairs and have to spend more money than usual. 

But the entry of Toyota into this market has significantly lowered concerns. It is well known that Toyota has the largest dealer and service centre network in Thailand, and from consumers’ point of view, Toyota is a brand with vehicles that you don’t have spend a lot on where repairs are concerned. 

Honda is also banking on its large dealer and service network. Honda’s vehicles have been accepted as reasonably priced, while after-sales service is of a good standard. Honda has also been creating awareness in terms of being a technology leader throughout. 

If things go as I think they would, we’ll have to see who will be the next player in the hybrid market, and which segment will it enter – above or below Bt1 million. Toyota’s vehicles are more than Bt1 million while Honda’s is below that figure. 

It is also interesting to see whether either of them will cross ranges and launch attacks, or whether they will remain on different sides of the market and keep from bruising themselves.