Milwaukee-based specialty vehicle makers REV Group Inc. could see its international revenue match its current sales total within five years, company president and chief executive officer Tim Sullivan told analysts this week.
REV Group launched a joint venture earlier this month in China with Chery Holding Group to manufacturer recreational vehicles, ambulances and other products for distribution in China and other international markets.
The company also recently established a 130,000-square-foot factory in Brazil to serve Latin American markets. Sullivan said that facility is profitable after six months of operation.
“It will take significantly longer to reach this type of financial performance in China,” he said, “But clearly demand will be much larger when the China operation is up and running.”
The decision to partner with Chery was the result of a two year process and Sullivan said the company was chosen because it is a prominent maker of passenger vehicles in China and also exports to 80 other countries.
“We are really putting together a master plan whereby we will be exporting from China into select countries,” Sullivan said. “It’s a strategy to enter the China market, but it’s also using that type of manufacturing base to attack a lot of different countries that aren’t even on most people’s radar screens today.”
Analysts asked Sullivan how big the company hopes its international business could become compared to REV Group’s total revenue, which reached almost $2.27 billion in fiscal 2017.
“I’d like to tell you it’s going to be equal, but that’s a big number, right? But it’s a big world out there and we have done a lot of research into it,” he said, adding a lot of the company’s management team has significant international experience.
“Ask me a year from now and I’d have a better idea of what it may look like, but in five years it could easily be equal to what we are doing now, easily,” Sullivan said.
One area the company will likely not go is into European markets. Sullivan said REV Group often is encouraged to look at Europe by others, but the area has not been consolidated and would require buying a lot of companies.
“We have zero interest in the European market, zero,” he said.
