Wheelchair van makers see growth

Colorado retailer Tim Myers sums up his optimistic outlook for the wheelchair van market this way: More Americans with disabilities simply want vehicle mobility. And that's creating an opportunity for retailers.

"It's a growing niche market," says Myers, manager of MV-1 wheelchair-accessible vehicles for Medved Auto Group near Denver. "There's increasing awareness that mobility is available to Americans with disabilities.

"There are wounded warriors who now receive vehicle benefits from the Veterans Administration. And there is the aging baby boomer generation -- some of whom simply want a vehicle that you can roll a Hoveround scooter into."

Medved may sound like a medical equipment company, but it is the name of CEO John Medved, whose dealership group sells Buick, Cadillac, Chevrolet, GMC, Ford, Chrysler, Dodge, Jeep and Ram. Last year, the group also sold its first 100 MV-1 vehicles, retailing for about $55,000 each.

The MV-1 is built on the former Hummer H2 line in Mishawaka, Ind., by AM General for Vehicle Production Group, a suburban Detroit maker of wheelchair-accessible vans. The MV-1 uses a platform originally intended to be a taxicab, rides on a chassis engineered by Roush Perfomance and is powered by a 248-hp V-8 engine from Ford Motor Co.

"And yes," Myers confirms, anticipating the question, "it's a profitable business."

Profitable enough that the three key players in the wheelchair-accessible van segment -- Vehicle Production Group, Braun Corp. of Winamac, Ind., and Vantage Mobility International of Phoenix -- are looking for more U.S. retailers.

Vehicle Production Group has 85 dealers and CEO John Walsh intends to take the network to 150 by the third quarter. Braun has 215 retail locations and wants to have 260 within two years.

Vantage Mobility also is expanding its network of 250 dealers.

"We are actively recruiting mobility dealers in 20 markets," Vantage Mobility CEO Doug Eaton says. "If there's an auto dealer who can help us service, market and sell the vans, we'd love to work with them. In our business, we do things a little different. Automakers might put 12 dealers into a major market. We have just one or two per city."

Eaton estimates that the wheelchair-accessible van market is poised to triple, from about 15,000 units a year now to around 45,000 in five or six years.

"Baby boomers are turning 65 at the rate of 10,000 a day," he says. "And that will keep up for the next 17 years. Age-related disabilities will follow, and people are now living longer. So it's really a perfect storm for our demographic."

Another piece of the equation: disabled American veterans. Benefits for vehicle purchases go to veterans who were disabled in the line of duty, as well as those injured outside the war arena, in some cases covering more than $40,000 of the final sticker price. And some benefits recur over the veterans' lives.

"But the average vet, and the average U.S. citizen, for that matter, doesn't realize that wheelchair-accessible vehicles are available," Eaton says. "Between three and four million Americans are in wheelchairs, and only 3.5 percent of them own a wheelchair van or a significantly converted vehicle. Our marketing efforts try to create more awareness."

The need is rising, but here is the catch: Retailing wheelchair-accessible vehicles to consumers with disabilities is not a business for just anyone. Marketing the vehicles is precise and targeted. It requires finding and meeting potential customers where they are, such as at fundraising events and telethons, veterans' events, assisted-living trade shows and even children's hospitals and physical therapy centers.

Medved's Myers recently took his MV-1 and sales literature to a Colorado skiing event hosted by the National Sports Center for the Disabled. If just one or two potential customers are interested in looking at the vehicle, he says, then such an outing is effective marketing.

Selling wheelchair-accessible vehicles also requires a dedicated staff -- probably a small one, because of the low volumes -- and considerable patience. Traditional vehicle lenders often shy away from the complexities of the transactions. And a sale can take 30 to 90 days, depending on the benefits involved and any additional equipment and components the buyer requests. Add-ons, such as steering knobs, electronic hand controls or special seats, are an incremental piece of the revenue stream.

Product needs vary from fully re-engineered vans to refitted vans that have special seats to help passengers or drivers enter and exit the vehicle.

Vantage Mobility and Braun convert Toyota Sienna, Honda Odyssey and Chrysler minivans. Workers at Vantage Mobility's factory in Phoenix modify the vehicle structure, raising the ceiling and lowering the floor, moving fuel and brake lines and reinstalling carpet and trim panels. The plant has 27 work stations dedicated to the vehicles' electronic systems, including installation of hand controls to allow the vans to be driven without the use of foot pedals. After modifying the vehicles, the company must retest them to ensure that they comply with federal safety standards.

Vehicle Production Group bypassed such van conversions when it designed its MV-1 from the ground up. But Walsh, who stepped in last year as CEO, says the company missed the mark on how to retail the MV-1 when the van launched in 2010.

Vehicle Production Group originally set out to put franchises into auto dealerships -- just as a Mazda franchise might be added.

Walsh agrees that "somebody like an established Ford dealer who understands service and quality" would be an ideal candidate to become an MV-1 retailer. But he favors a kind of "subsidiary" approach, in which the mobility business has dedicated MV-1 sales and service operations.

Walsh, who came from a management background working with buses and shuttles used for riders with disabilities, says the company will work closely with the National Mobility Equipment Dealers Association, a nonprofit organization created to improve transportation options of people with disabilities.

"We're retooling," says Walsh, who also moved the company's headquarters from Miami to suburban Detroit. "We're not a car manufacturer. We're in the mobility business. Our previous management believed we could sell our products like traditional car dealers, and that's not how it works.

"You really have to be involved in the mobility community," he says. "You have to be able to understand and think like someone who has a disability.

"One of the first questions I asked when I came here was, 'How many employees do we have who are in wheelchairs?' They said, 'Why does that matter?' I said, 'Because they teach you the market.' We had a company brochure that showed a picture of someone riding a bicycle."

Walsh also plans to expand the company's product line next year to include a mainstream vehicle. In mid-2014, Vehicle Production Group will launch a cargo van version of the MV-1. The new model will use the wheelchair van's side entry and extendible ramp to attract commercial users and delivery fleet sales.

The van is also changing to a more fuel-efficient engine, replacing its Ford 4.2-liter V-8 with a Ford 3.7-liter EcoBoost V-6.

Vehicle Production Group sold 2,500 vehicles last year. Walsh forecasts about 4,000 this year and 6,000 in 2014.

He is not alone is planning to expand his company's product line.

Braun President Nick Gutwein says he is pursuing different product platforms to add to his offerings. Without unveiling details, he refers to upcoming additions as "nonminivan. A lot of people just don't want to be in a minivan anymore."

But Gutwein points to a challenge: Unlike Vehicle Production Group -- which designs its own vehicle and has it built by AM General -- Braun and Vantage Mobility retrofit mass-market vans, limiting their ability to change the vehicles. General Motors and Ford also make their large vans available, and some smaller shops use the Mercedes-Benz Sprinter van for wheelchair-accessible vehicles. But those are converted in low volumes.

Chrysler's minivan platform is available to anyone who wishes to convert it and has been the volume leader for wheelchair-accessible van conversions. American Honda Motor Co. has approved Braun and Vantage Mobility to use its Honda Odyssey. And Toyota Motor Sales U.S.A. recognizes Braun and Vantage Mobility as partners in producing wheelchair-accessible versions of the Sienna.

Toyota's partnership designation means that Braun and Vantage Mobility have full access to Toyota's supply chain, warranty departments and dealer service shops. Although Toyota's dealers are not authorized retailers of the wheelchair-accessible vans, their service departments accept the converted vans when they need warranty work.

Meanwhile, some automakers provide mobility components to varying degrees. GM Mobility provides a small catalog of accessories to third-party wheelchair van upfitters. And Toyota markets through its dealers a mobility seating system for the Sienna, called the Auto Access seat, which swivels sideways to give a passenger or driver with disabilities easier entry. Franchised Toyota retailers can order the seats factory-installed on certain Sienna packages, without involving Braun or Vantage Mobility. But full-fledged wheelchair-accessible Siennas must be obtained through the Braun or Vantage Mobility franchises.

Mark Oldenburg, manager of Toyota's mobility department, says the automaker expects more products to come.

"We regularly hear from our retailers that they have older customers come into their dealerships -- not even disabled customers, but older consumers who maybe just have trouble walking, or just getting in and out of their car" Oldenburg says. "They tell our dealers that they had no idea there were products on the market to help them."

Gutwein also wants more.

"I expect to see more automakers getting into this market," he says. "When you look at what's on the road here right now, 85 percent of the products are large side-entry vehicles with side entry for the wheelchair. While in Europe, 90 percent are smaller rear-access vehicles that don't exist in the U.S. market.

"I believe we're going to see more of those European products coming into our segment."

In February, Braun founder Ralph Braun died of cancer at age 72. In addition to being an inventor and businessman who employed 850 in Winamac, a town of 2,500, Braun had muscular dystrophy and used a wheelchair most of his life. He is as an early advocate who helped stimulate the market segment in the 1970s.

Recognizing that his death was at hand, Braun prearranged a new company ownership structure with family members, management, employees and outside investors.

"Ralph was our inspiration," Gutwein says. "Not just in making sure we focused on the needs of the disabled. But also in raising consumer awareness for the products we're selling.

"Raising awareness is critical to growing this segment," he says. "There are people whose lives would benefit from these products. We just need to reach them."