Searching For The American Dream, In A Chinese RV

 @ibtimes on May 25 2012 9:49 AM

Potential
Potential buyers at an RV exhibition in China, 2011. Photo from www.rvchina.cn

The motor monstrosity beloved by suburban Americans, the recreational vehicle (RV), is gaining a die-hard fan-base in China.

The American dream of living on the open road, seeing the country on your own set of wheels, and getting away from the hustle and bustle of the city is also becoming a Chinese dream.

Granted, China lags behind even its much smaller neighbors South Korea and Japan in RV numbers, but it is quickly catching up. In 2001, there was only one single, lonely RV in the entire country. By 2010, there were 900 on the road. By the end of 2012, there are expected to be 6,000.

That's not far from South Korea's 10,000 RVs, but still way behind Japan's 78,000. The latter country currently has 1,350 RV-accessible camping locations. China only has 100 existing -- and difficult to access -- spots, mostly centered around Beijing and other major cities. The grand king of the RV lifestyle, the U.S., has almost 9 million on the road.

Skeptics may point out a few questions. Where do you find parking for an RV in a Chinese city? Can Chinese roads even accommodate them? Do the Chinese actually camp?

Those questions drive at two critical points: The country's lack of infrastructure for accommodating large motor vehicles and outdoor vacationing; and whether Chinese culture itself is amenable to such activities.

But if China is good at anything, it's building new infrastructure. Culture, meanwhile, is itself shifting as middle- and upper-class citizens become suffocated within the confines of ever-enlarging urban zones. They now have the money and an eagerness to spend it on the outdoors after suffering from urban pollution without the chance to leave it behind.

Major cities in China are now eager to provide those opportunities to get away. On Thursday, the Shanghai Tourism Administration said it had plans to build 20 new RV campgrounds around the city. Many will be placed near suburban and rural areas, while some will be built near Shanghai's Disneyland.

The entire Yangtze Delta region is expected to get 400-500 new locations by 2020.

The government predicts that the RV tour market could be worth 10 billion yuan by 2020, or about $1.6 billion. By that time, there could be 3 to 6 million consumers shopping for RVs in the Delta area alone.

A visit to Chinese RV website www.21rv.com shows that Chinese companies are eager to market their own towable and motorized designs against famed Western makers like Winnebago. China's super-rich have been eager to import larger U.S.-made caravans, but the purchases are mostly meant to impress business partners and rivals rather than to actually be taken on road trips.

Companies like Beijing-based Great Wall Motors are instead looking to market smaller, cheaper options to the growing middle-class. Chinese automakers are eager to push their own designs, largely within the 200,000 to 400,000 yuan range ($32,000 to $63,000). That's still generally more expensive than small RVs in America, but economies of scale are expected to gradually reduce prices as more families make purchases.

Great
Great Wall's trailer attachments have been a big hit in China, coupled with its popular Wingle 3 truck. Photo from www.21rv.com

But even if the Chinese appear to be seduced by the American image of motor-home ownership, some U.S. RV makers are still wary of doing business in China.

Peter Orthwein, the CEO of America's largest RV maker, Thor Industries Inc., said in an interview that there was still too much uncertainty in the China market for him to want to open up facilities there or enter into a joint venture with a Chinese company. Too many complex factors, such as regional Chinese laws against civilians towing vehicles, remain as barriers to making a more significant investment, in Orthwein's opinion.

The market is growing, but it's a long ways away, Orthwein said.  Why do they need us? he added, pointing out that Chinese companies could copy the technology and do it themselves.

His criticism may have some sympathetic listeners. One U.S.-based RV maker has already suffered from exposure to China. In July 2010, California's MVP RV Inc. was purchased by Chinese businessman Winston Chung. The company announced plans in January 2011 to build 30,000 small- and large-sized vehicles for export to China, altogether worth some $5 billion. Chung originally bought the floundering company for $18.6 million, promising to invest another $310 million to expand its operations.

A year and a half later, in February 2012, MVP was shut down and liquidated.

Chung was taken to court by a Chinese investor group called Fardar International, for forcing them out of the MVP deal and then using fake documents to claim full ownership of the company.

But many in the U.S. are not dissuaded. The U.S. Recreation Vehicle Industry Association has eagerly sent its vehicles to showcases and exhibits to China in recent years. It has also opened up a new office in Beijing with its own representative. Forest River Inc., America's second-largest RV maker, owned by Warren Buffett's Berkshire Hathaway, has a $20 million joint-venture in China with the China Dragon Auto Group Ltd., a bus manufacturer. The two have already set up production facilities for RV manufacturing.

China's now-numerous car companies are betting that urban Chinese families will want to chase after the wilderness, especially when little of it is left near where they live.

So, this summer, if you're heading out in your family RV, consider that halfway around the world, a small but quickly growing population of Chinese is also doing the same. And as Americans take their family vacations across majestic national parks and camp near the Rocky Mountains, an increasing number of Chinese will be setting up at the foothills of the Great Wall and in woodlands near the Yangtze River.

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