Recreational vehicles to embrace greater acceptance

Updated: 2012-03-23 09:27

By Wu Wencong and Yang Wanli (China Daily)

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"There are also problems importing components. Each type usually arrives by the container-load. The volume in each container is enough to last my factory three years, but I have to pay the fee in a lump sum," said Meng.

A vicious circle

The immature industry chain inevitably means that the domestic price of an RV is high (See panel above). So much so, the sector is one of the few industries where the label "Made in China" does not guarantee a lower price.

Liu Yujiao is in charge of RV sales at the privately owned Great Wall Motor Co. He paid a visit to the 49th Caravan Salon Dusseldorf trade fair in Germany, one of the largest RV exhibitions, in August 2010, emphasized how much cheaper Western-made RVs are when compared with Chinese models.

"Their scales of production and sales volumes are much larger, and they have a mature assembly line," said Liu. "I could also achieve that level of production by purchasing large quantities of components and lowering my prices, but who will buy all the RVs I produce?"

The high retail price, partly a result of the high production costs, is also a factor preventing potential customers from buying RVs, completing a vicious circle in the fledgling industry.

A lack of facilities

Growth isn't just being hampered by policy glitches and the high price of RVs, though. A lack of facilities is also being cited as a factor limiting expansion.

Wang at 21rv said there are just a few dozen camp sites in China, and that 80 percent of them are located north of the Yangtze River.

"A decent camp site calls for investment of at least a few million yuan, in addition to the cost of the land," he said. "Each place is usually priced at 200 yuan a night. Setting the price too low means operators can't recoup their investment, while setting it too high runs the risk of losing customers."

Wang Dongping, general manager of the China Travel Service Assets Management Corp, compared the situation with that in Japan, where many camp sites were built by the central government and are operated by private businesses.

CTSAM, a division of China National Travel Service (HK) Group, was one of the few State-owned enterprises to enter the RV market in the early days, helping to develop and operate camp sites.

"I dare say some people can make money by operating camp sites," Wang Dongping said at an RV forum in August. "But why are we doing this? As a State-owned company, our mission is to build the network first." He told the forum that CTSAM, aims to build 20 new sites this year, add 50 more in 2013 and increase the number by 500 in 2020.

However, that may all be irrelevant, according to Wang at 21rv. He explained that the official number of camp sites around Beijing is 20, but that only four are actually operational. Some of the land was developed as camp sites so the developers could claim government subsidies, but they were not well managed. So the customer flow was small and soon the camp sites existed in name only.

A bright future. When?

Given a national motor-vehicle ownership of 100 million versus an RV ownership of 6,000, the growth potential is obvious. The people China Daily spoke to all believe in the industry's future, but the question is: When will it happen?

The good news is that many observers believe the boom times will arrive in three to five years - the bad news is that people have been saying that for quite a while now.

In 2010, when the first Beijing International RV and Camping Exhibition was held in the southwestern Fangshan district, many insiders were confident that the RV era would arrive soon.

Now, with another exhibition in full swing, many insiders are still struggling with the same problems they faced at the beginning.

"Having a little faith is important," said Liu Yujiao at Great Wall Motor Co, "Many industries, when put into a Chinese context, grow beyond the international pattern, like the explosion in sales of cell phones and private cars. Perhaps the next pleasant surprise will arrive in an RV."

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