Riverside motor home maker MVP RV Inc. is planning to build and export 30,000 vehicles to China under an agreement with a Chinese entrepreneur that is expected to add 1,200 new jobs to the Inland Empire, an area hit hard by the recession.
Under the deal with the businessman, Winston Chung, who last year became the RV firm’s majority owner, the company will build $5 billion worth of the diesel-powered vehicles. The agreement was highlighted at the White House as part of Chinese President Hu Jintao’s state visit this week.
MVP RV hopes to begin soon manufacturing the 10,000 tour-bus style and 20,000 smaller recreational vehicles. They would be exported over the next three to four years.
China is an “untapped market” for motor homes, said Scott Degnan, vice president of sales and marketing for MVP RV. The company has 150 employees and expects to hire about 1,200 new workers, primarily in blue-collar, production line jobs, he said.
The new jobs come at a crucial time for the region, said economist John Husing, an expert on the Inland Empire economy. “Having a major employer coming into the manufacturing base out here is huge,” he said.
In November, unemployment in the Inland Empire was at 14.3%. “This is a big deal,” Husing said.
Officials at the National Recreation Vehicle Industry Assn. in Reston, Va., welcomed the announcement.
China is an “infant market … with tremendous potential,” senior director Bill Baker said. “You have Chinese consumers with more disposable income and more leisure time taking an interest in RVs.”
The deal will provide a boost for the RV industry, which was hit hard in recent years by spikes in gasoline prices and the recession. Recently the industry has been looking up, Baker said. As of November, manufacturers shipped 50% more vehicles to dealers than the year before, illustrating rising sales, he said.
China’s infrastructure is improving and more campgrounds are being built, said Degnan of MVP RV. Large motor homes are still a rarity in China. But the smaller vehicles, which he described as “glorified vans,” are popular.
MVP RV is headquartered at factories vacated by another motor home maker, Fleetwood Enterprises, which filed for bankruptcy protection and left the area in 2009.
Formed in 2008, MVP RV began producing primarily travel trailers, but stopped production four months later when stifled by the recession. The company was exploring the idea of building electric cars when the owners were introduced to Chinese entrepreneur Chung, now the firm’s majority owner.
Chung paid $18.6 million in July for the Riverside factories and headquarters. As part of the agreement announced this week, he will provide $310 million in financing to build the motor homes.
Chung will also finance further development of an electric motor home by the company, using “lithium rare-earth batteries,” Degnan said. The company created a prototype of the electric vehicle and shipped it to China, where Chung has displayed it at electric vehicle trade shows.
The deal was one of about 70 between the U.S. and China announced during Hu’s state visit, in what was called a demonstration of cooperation between the two countries.