MIDDLEBURY -- Occasionally, worries have brewed that recreational vehicles will be built in China and then shipped for sale to the United States, encroaching on the market served by Elkhart County manufacturers.
Few expected the reverse. With an unprecedented collapse of the credit markets and consumer confidence, however, Coachmen Industries Inc. is doing the unexpected to increase its market share.
The RV manufacturer has signed an agreement with Chinese automaker JinBei, a subsidiary of Brilliance Auto, to import and sell across China the Coachmen units built at the facility in Middlebury. As part of the agreement, Coachmen will start a manufacturing operation in China to serve foreign markets.
"It's just a great opportunity," said Tom Gehl, Coachmen vice president and director of investor relations. "We think the foreign markets can be very favorable."
The RVs made for China will be narrower than the big Class A motorhomes seen on U.S. highways and will have a modified electrical system. On the other hand, the Coachmen name, as well as the overall styling and features, will be the same as those built and driven in America.
"The Chinese love the American dream," Gehl said. "China loves American brands."
What impact the agreement have on the workforce in Middlebury is difficult to determine, Gehl said. Since 2007, Coachmen has cut 40 percent of its employees.
Gehl downplayed the possibility that the units built in China could be shipped to the U.S.
"I don't really see that at this point," he said.
In addition to China, Coachmen is expanding at home. The company reached an agreement with a major RV dealer in California and will be creating more of a presence there.
Coachmen is working with JinBei to choose the RVs best suited for the Chinese market. Then, possibly as soon as the first half of 2009, RVs from Middlebury could be rolled onto ships and sent to China.
"Sooner rather than later," Gehl said. Although Coachmen wants to start building RVs in China, Middlebury-made products would be sold alongside the China-made units since Chinese buyers have an appetite for both foreign and domestic items.
Relying on the network of dealers and markets that Brilliance Auto has developed, Coachmen foresees its RVs entering into Russia, the United Arab Emirates and Egypt. In addition, the company, which already is selling units in Australia, believes its motorhomes and towables will find buyers in Korea and Japan.
As wealth grows in China and the middle class emerges, RVing is becoming a popular pastime, Gehl said. Although the country does not have a system of parks and campgrounds to accommodate RVs, many municipalities are intent on building appropriate recreational areas.
The agreement with the China manufacturer, Gehl said, will enable Coachmen not only to increase its markets but also to help reverse the nation's trade deficit by "sending product there and bringing cash back."
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