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Nexus RVs to Use Factory-Direct Biz Model

Claude Donati and Dave Middleton played Little League together, attended Penn High School together, and this summer co-founded an RV manufacturing company together.

The company, called Nexus RVs LLC, on Tuesday (Oct. 19) announced plans to invest more than $2.8 million to lease and equip the former Prodesign plant complex on Reedy Drive at Elkhart County Road 13 on the north side of Elkhart, Ind., for their motorhome production venture, the South Bend Tribune reported.

For the past few months, Donati and Middleton have been operating their company headquarters from the University of Notre Dame’s Innovation Park in South Bend. They may retain offices at Innovation Park, even after production commences in Elkhart.

Nexus RVs initially expects to hire about 25 employees by late January, and another 25 people by summer 2011 to produce and sell Class B-plus-style and Class C motorhomes. These employees will work in separate 86,000-square-foot manufacturing and 22,000-square-foot buildings located adjacent to the Indiana Toll Road.

By 2013, Nexus expects to employ up to 90 people. Donati anticipates his company could be producing Class A motorhomes over time as well, using a factory-direct business model that the founders believe will distinguish their company from many of its competitors.

“As opposed to visiting a local dealership where five or six companies might display their products, we’re cutting out the second tier of the process. It will be like buying your car directly from Ford or Toyota,” said Donati, Nexus RVs president.

“Only we’re a house on wheels, so it’s actually more like meeting directly with your homebuilder, and we also have the ability to customize,” he said. “Over the last few years as the recession hit and the economy ground to a halt, it opened an opportunity for us to change the business paradigm.”

Nexus RVs will produce 23- to 32-foot motorhomes that will cost around $55,000 to $60,000. Donati expects the first prototypes to be ready for some RV shows at the end of January 2011, and the price point to resonate with consumers as the national economy rebounds from the recession.

“Banks are still not loaning money and consumers are still not able to afford to spend $150,000 on a Class A motorhome,” said Donati, a more than 15-year veteran of the RV industry. He most recently served as vice president of the motorized division at Gulf Stream Coach Inc. in Nappanee.

Middleton, Nexus RVs vice president, served in various management positions in the Gulfstream motorized division.

Startups like this are a sign of the industry’s strength and resilience, said Kevin Broom, director of media relations for the Recreation Vehicle Industry Association (RVIA).

“The industry is bouncing back because the desire for the RV lifestyle remains strong. Consumer demand for RVs never dropped during the recession. What changed was the ability of consumers to purchase RVs,” Broom said.

“As credit markets have normalized, that pent-up demand for RVs is being released,” he added.

Nexus RVs recently received a property tax abatement from the city of Elkhart, as well as up to $725,000 in performance-based tax credits and up to $50,000 in training grants based on job creation plans from the Indiana Economic Development Corp.

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#1 Comment By Ernie Kieffer On October 20, 2010 @ 5:42 pm

So, They are going to sell factory direct? Other manufacturers have tried this and a few are doing it. I want to know why these factories think they can cut out the dealer, or even want to. Who is going to repair these units on the road?

DO you think Ford or Toyota caould sell factory direct and take proper care of the customer?

Well Good Luck with this one!

#2 Comment By Brian On November 30, 2011 @ 1:46 pm

I heard they burnt their bridges in the dealer network. They had to go this route.