VPG Stops MV-1 Production

• By Laurie Watanabe
• May 31, 2013

Vehicle Production Group (VPG) has stopped producing the wheelchair-accessible MV-1 car, according to multiple news and automotive publications.

Those reporting the company's shutdown included USA Today, Autoweek and Motor Trend. While reports said nearly all VPG employees had been laid off, they added that VPG had not filed for bankruptcy (as of press time).

A U.S. Department of Energy report said it finalized a $50 million loan to VPG in March 2011 based on the vehicle's use of compressed natural gas, a fuel choice with lower emissions than standard gasoline. The report also quoted a VPG estimate that the company would produce 22,000 vehicles a year -- though some of that number would use regular gasoline rather than natural gas -- and would create 900 permanent jobs.

USA Today reported that VPG's most recent CEO, John Walsh, said the shutdown was caused by cashflow issues and a dealer network that wasn't robust enough.

Who Needs a Dealer Network?

That comment had to be ironic since operating without a dealer network was VPG's original plan.

The manufacturer took MV-1 on a 2010 nationwide tour that visited shopping malls and rehabilitation hospitals. While at Rancho Los Amigos National Rehabilitation Center in Downey, Calif., then-CEO Dave Schembri told Mobility Management that VPG was opting to sell the MV-1 online rather than through automotive or mobility dealers. Buyers made a $250 down-payment and filled out order forms at the company's vpgautos.com Web site.

The MV-1's claim to fame was its purpose-built design. This car, VPG would trumpet with the mainstream media magnifying that cry, was no converted minivan that had started life as a standard model, then had a ramp added to it. Every MV-1 was accessible, with the front passenger space left seat-less and designated for wheelchair use. VPG touted this design as giving wheelchair users the supposedly all-new chance to "ride shotgun."

But VPG's claims didn't stop there. Schembri was quoted by msnbc.com as saying converted minivans suffered from diminished ride quality and poorer handling versus the MV-1, and called the crash-worthiness of converted vehicles into question.

Those sorts of claims were published by multiple mainstream news outlets much to the ire of manufacturers in the adaptive automotive equipment sector.

Riding Into the Sunset?

What's next for VPG?

Autoweek reported in early May that the company was in the process of being sold, and theorized that AM General could be the new owner. AM General is best known for manufacturing military Humvees and their now-defunct civilian Hummer counterparts, and the company assembled the MV-1. A story by the Detroit Free Press said a new owner would be responsible for paying back the Department of Energy loan.

Meanwhile, two automotive conversion manufacturers made announcements in light of the VPG closure reports.

Braun Corp.'s Kevin McMahon, EVP of sales & marketing, noted "repeated examples of start-up companies ultimately failing due to faulty product concepts and ill-defined business models," and added that when such companies closed down, "it is the customer who suffers the most damage." One of Braun's primary concerns, the company said, was an August 2012 ruling by the Federal Transit Authority (FTA) in favor of VPG, "effectively eliminating accessible Chrysler minivans as an option for hundreds of state and local transit agencies nationwide." Braun said it had submitted "exhaustive documentation proving our status as a final-stage assembler under provision of FTA rules and federal law," and at press time was hoping for an FTA decision that would allow it to "fulfill the needs of wheelchair and scooter users who depend on accessible minivans for daily transportation."

Vantage Mobility International (VMI) announced that the company and its dealers have created a response program to help consumers who've purchased VPG vehicles. By calling (855) VPG-VANS or visiting vpgcrisis.com, consumers can get advice about topics such as MV-1 repairs and warranties. "Our top priority has always been to take care of our customers," said Doug Eaton, CEO/president of VMI. "That's why we appreciate our Select Dealer Network taking the initiative to create a support program for MV-1 owners and help ensure that none of them are stranded."