Local car modifier Thai Rung Union Car has expanded its business through a subsidiary to become a dealer for a giant bus manufacturer in China.

Subsidiary VP Auto Service signed a two-year deal yesterday with the Zhengzhou Yutong Group of China to become the sole distributor of Yutong buses and products in Thailand, as well as its service provider. The Chinese Yutong group of companies has a strong reputation in the manufacture of medium- to large-sized buses.

Thai Rung managing director Sompong Phaoenchoke said marketing activities were expected to begin in the third quarter.

The company plans to penetrate the domestic market for large and medium-sized buses that use diesel- or natural-gas-fuelled engines. The large buses have 40 seats, while the medium-sized models have 20.

Sompong said he expected to sell 100 buses in the first year. The current total market is about 1,200 units per year.

"Over the next few years, sales of Yutong buses should take a 15-20-per-cent share of the total market," said Sompong, adding that the company's main clients would be the Bangkok Mass Transit Authority, joint Bangkok and other transport firms and car-rental companies.

Thai Rung expects sales of Bt300 million starting from the fourth quarter.

If the venture proves successful, Thai Rung plans to invest jointly with the Zhengzhou Yutong Group in a new venture to produce various kinds of mass-transit buses in Thailand over the next few years. For its part, the Yutong bus-maker is planning to use Thailand as a production base in the future, Sompong said.

A plant should be constructed in the next six to eight months at a cost of up to Bt600 million on the same site as Thai Rung's car-modifying plant in Chon Buri province.

The two-year distribution deal signed yesterday is open for possible extension.

Watcharapong  Thongrung

The Nation