Dongfeng eyes Thai heavy-duty trucks

Dongfeng eyes Thai heavy-duty trucks

Chinese truck maker Dongfeng Commercial Vehicles Co is making a foray into Thailand's heavy-duty truck and bus market.

Jean-Noel Thenault, Dongfeng's senior vice-president for overseas business, said the company plans to develop Thailand as a hub for trucks and buses for the right-hand-drive market in Asean.

Dongfeng chose Vietnam last year as its centre for the left-hand-drive market in the region.

"Dongfeng now has combined sales of 7,000 units in Vietnam, and we expect a similar achievement in the Thai market," Mr Thenault said, adding that Thailand is the most efficient market in terms of competition, logistics and tourism.

Moreover, Thailand's border trade is thriving and the country is a hub for distribution centres for goods and products across the region.

According to Mr Thenault, the Hubei-based firm will set up sales and service units locally after establishing Dong Sheng Motor Thailand last year.

Dongfeng Motor Co holds a 80% stake in Dong Sheng Motor Thailand with registered capital of 20 million baht, with the remaining 20% owned by Thai partner Tadee Group.

At present, the joint-venture firm runs a service centre near Navanakorn Industrial Zone and a warehouse in Ayutthaya's Wang Noi district.

"We will not only sell trucks but also support all services for Thai customers which are Dongfeng's business goal in Thailand," Mr Thenault said. "We hope to gain a 5-10% market share in Thailand's truck and bus market by 2025."

Yuan Honggang, general manager of Dong Sheng Motor Thailand, said the company expects to sell 200 units in 2016 and 500 next year.

Thailand's truck and bus market is now led by Japanese brands Hino, Isuzu, Fuso and UD. Hino and Isuzu represent more than 80% of the overall market.

The truck and bus market is projected to grow by 10% this year to 30,000 units driven largely tax incentives given to local companies that invest in buying new commercial vehicles.

From Nov 3, 2015 to Dec 31, 2016, the government has offered corporate tax deductions of up to two times depreciation costs to local companies that invest in new machinery, equipment, furniture, computer software, commercial vehicles and buildings to enhance their competitiveness.

Mr Thenault said Dongfeng trucks and buses are competitive against Japanese rivals as they are produced with European technology.

Dongfeng Commercial Vehicles is a joint venture between Dongfeng Motor Group and Volvo Group, the Swedish truck and bus maker, holding equal stakes of 45%.

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