I think some experiences from past relationships with Chinese hobby product manufacturers and distributors are in order to add some perspective to what some believe to be a KAV problem. The reports from Mr. Sibelius and those that have visited KAV have left little doubt to what the problem is, and the problem does not reside with KAV. Not by any means. To the experiences.
Some years back I was regarded as an RC, two stroke gas engine expert and my opinions were highly sought after. This was back in the days giant scale RC airplanes were just become popular and the industry leaders for RC gas engines were companies like DA, 3W, Brison, Taurus, BME, and a couple of other European makers. Those brands established the performance standards for all the brands yet to come, and in several cases, still do. But these brands were made in the U.S. and Europ, making them rather expensive and not affordable for a lot of people. Those that couldn't afford them felt they were being discriminated against and locked out of the hobby by the wealthier segment of the RC community and complained loudly about deserving to participate, demanding that prices be reduced to a level that would make them affordable by anyone. As the cost of engineering, materials, and manufacturing labor were never going to get lower the engine manufacturers didn't even consider dropping their shorts. However, the Chinese hobby manufacturers saw an opportunity so they obtained various engine models from the quality engine manufacturers and reverse engineered them in order to mass produce them at lower prices, and lower performance and quality levels. That's how Chinese brand names like DLE, DLA, RCGF, and others came into being. I was one of those that reviewed new engine designs and reported their performance to the modeling community.
Regardless of quality and performance, the Chinese brands were cheaply made and sold at much lower prices than the brands that had established performance and quality standards. They sold in very large numbers and when combined with other cheap Chinese knock off products, allowed many to enter giant scale that really could not afford to participate. Regardless, there were more than a few opportunities to become and brand's sole importer oran area distributor, but without fail every Chinese company required the same conditions of those importing or selling their products. They all also engaged in the same business practices afterwards. The Chinese makers required their products be bought in full container volume, the wholesale cost of product, including shipping, be paid via wire transfer prior to a container moving, that a minimum monthly purchase volume be maintained by the retail distributor, regardless of whether or not the previous quantity had been sold, dealers were expected to perform warranty and/or repair work, and manufactures were to compensate dealers for their warranty labor. Fail to perform to those standards could see a new dealer opening up right next door to you. The Chinese distributors cared not one twit for their customers, all they cared about was getting their product out of the factory warehouses and putting cash in their banks.
It did not take very long for another common practice to expose itself; the Chinese manufacturers did not provide spare parts for warranty or crash repairs (sound familiar?), yet they still required their dealers to perform the work. Sending defective or broken engines back to China for repair was a non starter. Either the action would never get authorized or if sent, product often just disappeared, with the customers left holding the bag. Some dealer had high ethics levels and made those lost products good out of their own pockets. As dealers lacked a parts supply to make repairs, they resorted to disassembling good engines to obtain parts to fix broken engines. The impact of that was doubled up as the dealer was not reimbursed for the parts consumed in repairs and they removed a good engine that could have been sold from their salable inventory. So they lost in the sale of patrts and they lost in the sale of complete engines they they had already paid for. That loss of revenue doubled again as dealers discovered that most of the warranty work they were performing ended up being done for free as the Chinese manufacturers generally never paid them what was promised, so dealers bankrupted left and right. In essence, the Chinese manufacturers took the money upfront for their product, demanded continuity of sales volume, and said, "so sorry, no understand" when they were tasked with keeping their end of the agreement.
Some of what I perceive happening with or at KAV has appearances very similar to what has occurred before. Making this more troubling is Yuneec's history of failing to pay their suppliers, and remaining in default forever afterwards. Look to their creditor history back around the period the original 920 was being produced for the evidence of that. SOmething that supports a perception that Yuneec has again failed to make payments is that KAV is performing repairs where warranty work will not be involved. That tells me that KAV has reached the point they no longer can absorb the labor being expended for warranty work that isn't being paid for by Yuneec. You can't stay in business paying money out when no money is coming in, and the cost of employee labor is nothing to sneeze at. For every $ you pay someone you pay an additional $0.33 to $0.95/hr on top of it for tax, insurance, and benefits overhead.
That KAV is not making public statements related to the situation is commendable. That tells me they are hoping the situation can be corrected and that business can resume afterwards. The customer gets the short stick in all this as anything related to the customer ends up in neon lights in front of the public within minutes, which is exactly what can't be allowed to happen if there is any hope of getting paid. So I think KAV is not a concern. Worst case they end up shipping back unresolved warranty units to the people that sent them. They can't really say much of anything to the people sending them warranty repairs work without appearing to commit to doing the work. That's something they have likely ceased doing as a means of leveraging Yuneec into taking care of back due payables.
