Thailand's truck and bus market is expected to thrive this year thanks to tax incentives given to local companies that invest in buying new commercial vehicles.
According to Amnuay Pongwicharn, executive vice-president of Hino Motors Sales (Thailand), the truck and bus market is likely to grow by 10% this year to 30,000 units.
From November 3, 2015 to December 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 Amnuay said truck and bus sales are expected to rise significantly in the last quarter of this year despite slow growth in the first nine months.
From January through September, sales of trucks and buses rose slightly by 3% to 20,250 units, 90% of which were trucks.
"Truck sales, in particular, have fared quite well, driven by the busy construction and logistic sectors thanks to a ramping up of efforts to complete the government's megaprojects and transportation routes nationwide," said Mr Amnuay.
"Although the tourism sector is the key engine driving the Thai economy, bus sales remain cloudy because of aggressive competition among buses, trains and airlines, as well as zero-dollar trips from China," he said.
Mr Amnuay added without any tax incentives, he was quite worried about the prospects of the truck and bus market.
Sales are thus expected to stay flat at 30,000 units next year, he said.
At present, Thailand's truck and bus market is led by Japanese brands Hino, Isuzu, Fuso and UD. Hino and Isuzu represent over 80% of the overall market.
According to the Federation of Thai Industries, truck and bus sales hit a peak of 47,094 units in 2013, up 15.8% from 40,653 units in 2012.
The market dropped sharply in 2014 by 39.3% to 28,602 units sold. It further declining to 27,727 units last year.
Nonetheless, Supaman Munka, the Bus & Truck show organiser of TTF International Co, said the future truck market would remain very attractive thanks to the government's special economic zone development.