VPG’s Segment-Busting MV-1 Van Hits Road

MISHAWAKA, IN – Delivery of the first MV-1 van Wednesday put the finishing touches on a difficult triple play that has given birth to a new auto company, forged a unique market niche and resurrected an assembly plant once left for dead.

The MV-1, the creation of the upstart Vehicle Production Group, is the first vehicle designed from the ground up specifically to transport people with disabilities.

Backed by venture capitalists, chiefly private-equity fund Perseus, VPG has been working for the past four years to develop the MV-1 and prepare an idled AM General plant here – one-time home of the Hummer H2 – for production.

Wednesday marked the official Job One and sales launch, with VPG delivering the first MV-1 to Marc Buoniconti, president of The Miami Project to Cure Paralysis and a key sounding board for the auto maker during the design process. Buoniconti, the son of former Miami Dolphins great Nick Buoniconti, suffered a spinal-cord injury in 1985 playing college football for The Citadel.

Underpinning the MV-1 is an all-new ladder-frame designed by engineering specialist Roush and produced by Michigan-based Android Industries.

Power comes from a 248-hp 4.6L V-8 engine mated to a 4-speed automatic transmission supplied by Ford. Originally, the MV-1 was to get a General Motors powertrain, but VPG made the switch when GM entered Chapter 11 in 2009.

MV-1’s deployable ramp.

The boxy van resembles a London Taxi on steroids. Key features are its tall profile, low-to-the-ground load floor and expansive rear-door openings that measure 56 ins. (142 cm) high and 36 ins. (91 cm) wide.

There is no front passenger seat, enabling a wheelchair to occupy that space. Special anchor points in the floor and B- and C-pillar-mounted restraints secure the chair and its occupant. A rear bench seat offers room for three more passengers, and an optional jump seat that folds down from the back of the driver’s chair accommodates an additional rider.

An integrated ramp, supplied by ASC, deploys from the passenger-side rear door and can support up to 1,200 lbs. (544 kg), twice the minimum recommended by the Americans with Disabilities Act. It can deploy in two lengths, in aspect ratios of 4:1 and 6:1.

The MV-1 is not equipped with driving controls for the disabled.

Gasoline- and compressed-natural-gas-fueled versions are available, the latter helping VPG draw $50 million in grants and loans from the U.S. Department of Energy. In the CNG version, three 3,600 psi (248 bar) carbon-fiber tanks are mounted, two packaged under the rear seat and the third eating up a small portion of the rear cargo room.

Ladder frame underpinning MV-1.

The 3-tank capacity gives the CNG vehicles a 290-mile (467-km) range, nearly equaling the gasoline version’s 350 miles (563 km). Availability of a CNG model, expected to be popular with fleet customers, pulled financier T. Boone Pickens’ Clean Energy Fuels operation into the project, which will install CNG fueling stations at any fleet operation purchasing at least 25 MV-1s.

Fuel economy is rated at 15 mpg (15.7 L/100 km) city/highway for the gasoline version and 13.5 mpg (17.4 L/100 km) for the CNG model, VPG says.

The MV-1’s ace in the hole is its starting price, listed at $39,950 for the base SE model with a manually operated ramp and $41,950 for the Deluxe with a power ramp. That’s well below the $55,000-$70,000 spent on van conversions that currently serve this sector exclusively, VPG officials say.

The specialty van hits the market with 41 dealers operational, most located in the East, Midwest and Southeast. But VPG CEO Dave Schembri expects the count to increase to 60-80 in “the next few months,” when he says the retail network will be sufficient to cover the entire U.S.

Initially, Schembri says, VPG planned to court former Hummer and Saturn dealers who were looking for new product to fill their showrooms. But it turned out available brick-and-mortar wasn’t the driving factor in the selection process.

“We’re not looking for investments in facilities and signage. We’re looking for emotional investment,” he says. “We’re looking for dealers willing to do what needs to be done outside the dealership (to market the specialty vehicles). What’s important is what I see when I look in their eyes.”

VPG contends there’s a significant customer base waiting for a vehicle like the MV-1. Four million Americans are confined to wheelchairs and another 10 million with other disabilities. The DOE estimates there currently are 1.5 million vehicles on the road specially equipped to transport the disabled.

Schembri, a former Penske Automotive executive who headed its former Smart operation, says he’ll use “discovery marketing” to reach new customers, displaying the van at physical-rehabilitation centers and events tied to disabilities issues.

Dealers will deliver vehicles anywhere customers choose, and Schembri says VPG’s roadside-assistance program not only will tow the vehicle if needed, but also provide transportation for the occupant.

Targeted are individual retail buyers, taxi and other fleets and paratransit operators, with Schembri predicting sales will be split evenly between individual buyers and fleet customers.

The production launch at the highly flexible AM General Mishawaka factory here could be the beginning of a comeback for the plant, which was left without a product when GM decided to kill its Hummer brand two years ago.

Tooled for a capacity of 60,000 MV-1s annually, the plant remains far from its heyday when it employed 1,000 hourly workers and was knocking out 100 Hummer H2s daily on two shifts.

With the MV-1 contract, the United Auto Workers-represented facility is starting with fewer than 100 line workers and 60 salaried employees as it launches production at a pace of 12 units daily. It will add another couple-dozen workers as it kicks up output to 20 vehicles per day on a single shift.

Employees work one part of the line in the morning, building up a buffer of vehicles, then switch to another part of the line to finish the MV-1s in the afternoon, maximizing workforce productivity.

It may be a small operation, but it’s a start, says Plant Manager Dave Whitby, who tells WardsAuto AM General will continue to seek additional contract work for the flexible plant that includes body, paint and final-assembly operations.

“We’d like to have three to four vehicles here,” he says, noting AM General bought the factory, initially built with financing from GM, “for pennies on the dollar” when the auto maker filed for bankruptcy.

“There’s a business opportunity to do e-coating (for other auto makers),” he adds. “We could run (the paint shop) 24 hours a day. There’s a ton of capacity here.”

VPG says it is sold out of this year’s production, expected to total about 2,000 units. Chairman Fred Drasner, who also heads venture capitalist Three Seasons Capital, forecasts sales at 12,000 units next year and 25,000-30,000 in 2013.

The fledgling auto maker will hit breakeven on sales of 6,000 units, he tells WardsAuto. “We’ll be a success at 12,000 and a very big success at 30,000.”

The vans also will be sold in Canada. Additional markets outside the U.S. are being considered, but VPG would have to overcome tariff barriers and other distribution hurdles to expand overseas.

“We’re interested in international sales, but we would probably need a partner,” Drasner says. “We’re talking to one in Asia and one in the Middle East now.”

However, overseas expansion probably won’t happen until VPG can catch its breath a bit. Getting the MV-1 designed and launched hasn’t been easy, Drasner notes.

“We had to weather storms of economic disaster, the near-failure of the banking industry and the collapse of the auto industry,” he says.

Rick Smith, president-commercial business for AM General, sums it up the specialty-vehicle venture this way: “It took a small company to do what the auto industry couldn’t and wouldn’t do.”

[email protected]