Veteran U.S. RV manufacturing executive Bill Horvath presented his case today (Aug. 3) for why recreational vehicle industry suppliers should begin providing components to a Chinese RV builder he represents that’s planning to introduce a new line of motorhomes into the American marketplace.
Speaking to a crowd of nearly 70 in Elkhart, Ind., Horvath, a 38-year industry veteran, outlined the goals of the Yutong Bus Co. Ltd., a major Chinese bus maker that proposes to start building “En Route” Class A motorhomes this fall and begin marketing a 2012 model in the States next spring.
A cross section of vendors from LaSalle-Bristol to Atwood Mobile Products, Flexsteel and Spartan Chassis Inc. attended the 2-hour presentation and listened politely, but somewhat skeptically in some cases, as Horvath explained how his company plans to compete in the U.S. against proven existing competition.
Horvath said more than once that introducing a new lineup of competitively priced motorized RVs will be “a learning experience” for Yutong Bus Co. and that many details have yet to be ironed out.
Shipping costs, delivery times and quality assurance were the major concerns expressed by the vendors during and after today’s meeting.
As reported in an RVBUSINESS.com story last week, Horvath is lining up U.S. vendors to provide many of the components, which will be packaged in Elkhart and shipped to Zhengzhou, China, where they will be installed in Yutong’s massive 12 million-square-foot factory.
The finished units will be shipped back to the U.S., entering the country in Portland, Ore., where Horvath is setting up a facility as a service center for final inspection and dealer prep.
He hopes to have 30 to 40 motorhomes on the premises at all times to ship to dealers and will look to set up a Midwest service center at a later date if the business plan is successful.
The fiberglass-and-aluminum motorhome will be available in 28- to 30-foot lengths on 22,000-pound GVWR chassis equipped with 250/280 hp Cummins or Navistar rear diesel engines.
Horvath has already received quotes from chassis builders Spartan Chassis Inc. and Freightliner Custom Chassis Corp., and Detroit Chassis LLC CEO Michael Guthrie told RVBUSINESS.com that he hopes to be in the running as well.
Horvath wants to lock in on vendors’ quotes by the end of August and to start receiving components in October and begin final assembly in November.
Yutong Bus Co., the world’s second largest bus manufacturer, began to explore the feasibility of building a Class A motorhome (China’s first) and competing in the U.S. market three years ago, said Horvath, who’s previously worked with the Mallard, Damon and Columbia Northwest/Aliner brands in the States.
A Class A, rather than a towable RV, was preferable because the publicly held company had proven technology to build motorized vehicles. “It was most natural for us,” he said, adding that the En Route will be a smaller, more European-styled coach built on a U.S.-made chassis comprised primarily of U.S.-made components.
Compared to U.S. products, Haworth envisions the “En Route” as a less boxy line with simplified feature selections and exterior paint jobs and fewer slideouts. Interiors will be soft on the eye and feature plenty of radius touches.
He said Americans in the future will be opting for smaller Class A motorhomes and the En Route will be the size they’re seeking. “We will have to do everything the U.S. manufacturers do and go well beyond that,” he said, from quality manufacturing to after-sale follow-up.
The initial plan is to build the En Route in China, where labor rates for production workers average $300 a month.
Horvath, who is projecting sales of between 150 and 200 units in 2011 and 400 to 500 in 2012 won’t rule out the possibility of building the En Route in the U.S. some day. On the other hand, he said, there is a ”certain Chinese pride; they would rather do it their way.”
Horvath said he “thought there would be a lot more questions” from today’s meeting and doesn’t know how vigorous the vendors will be in submitting quotes. He said the initial relatively low production estimates may discourage some vendors from quoting, and he declined to mention a price range for the new coach because there are still too many unknowns.
After spending the week in Indiana, Horvath next heads to the Caravan Salon in Dusseldorf, Germany, then back to China by Sept. 5.
Meanwhile, Horvath is beginning to assemble a U.S. staff and has contracted with consultant Jim Kreider to assist in the planning. Horvath can be reached domestically at (574) 210-4886.