Thailand's two-month political crisis has already put a dent in Khwanjit Tantisuwanna's business, but that didn't stop him from buying a new BMW as Asia's second-largest motor show opened in Bangkok.
"I do worry a little that the economy could be affected by a prolonged political conflict, and my business is not good at the moment. But I decided to buy a car because of the attractive interest rate," Khwanjit, a 39-year-old small business owner told AFP.
Even though the central bank has consistently raised interest rates for a year, some dealers are offering zero-percent financing on new cars, which makes newer models with higher gas mileage all the more appealing.
"I bought this model because of its fuel efficiency and the zero percent interest rate offered. This car is for my dad, to replace his old one which uses too much petrol," he said at the Bangkok International Motor Show.
Buyers like Khwanjit make automakers optimistic that they'll post another record year in Thailand despite the political crisis that has seen weeks of street protests calling for Prime Minister Thaksin Shinawatra's resignation.
The auto show, the biggest in Asia after Tokyo, opened March 24 and runs through April 2, the date of Thailand's problem-plagued snap elections that officials fear could fail to deliver a new parliament.
"I would say oil prices and interest rates are the risk factors in the vehicle market this year, and in sales during the motor show," said Suraphong Paisitpattanaphong, spokesman of the Automotive Industry Club.
"But it is unlikely that the political situation would have a significant impact on decision of potential buyers," he said.
Last year, the industry posted record sales of about 703,400 units in Thailand, with total production at 1.1 million units.
Suraphong said domestic sales in the first two months of the year were in line with expectations for five percent growth.
Last year, 15,000 cars were sold at the auto show, which attracted 1.7 million visitors, according to the organiser Grand Prix International.
Compact sedans by Toyota, Honda and General Motors' Chevrolet along with models using alternative fuels are the highlights of the show.
A 44-year-old banker from Bangkok said she bought a Toyota compact Yaris as her family's third car because of the good fuel efficiency.
"I decided to buy a car before another rise in interest rates," said the banker, who asked for anonymity.
"I am not worried about the political situation, although it might have some impact on parts of the economy like tourism, but not general business like consumer products."
Forecasts for Thailand's economic growth have already been scaled back to below the government's target of five percent.
Adisak Rohitasune, president of the Thai Automotive Industry Association, said prolonged political tensions could take a toll on the car industry.
"If the situation is not ended quickly..., together with high oil prices, domestic car sales would probably be less than what we've expected," said Adisak, who is also a Honda executive in Thailand.
According to figures complied by Toyota Motor Thailand, cumulative car sales for the first two months of this year rose five percent to 103,883 units.
Toyota, Thailand's largest carmaker, tipped March car sales to be robust due to the motor show, the introduction of new models into the market and intensive sales campaigns. Overall target for 2006 is 735,000 units.
The auto industry expects overall production to grow by 10 percent to 1.2 million units, Suraphong said.
Many pick-ups produced in Thailand are sold overseas, especially in Australia. Exports should grow by 20 percent to 550,000 units, he added.
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