Canada’s A.H.A: Dramatic Growth Spurred by Production Efficiency & New Formal

LCT Staff
Posted on July 1, 1986
Mel Stein (left) and Blaine Hobson

Mel Stein (left) and Blaine Hobson

A successful Canadian-based limousine manufacturer is one of the best-kept secrets in the industry. A.H.A Automotive Technologies Corporation, based in Brampton, Ontario has recently become one of the limousine industry’s largest manufacturers in North America.

A.H.A has been in existence since it began operation in the Detroit area as a specialty-vehicle manufacturer in the late 1940s. In 1976, the firm, then known as A.H.A Manufacturing Co., moved to Ontario, Canada, under the leadership of owner Melvyn A. Stein. Adding professional cars to their limousine model line in 1977, A.H.A built vehicles for use by the funeral industry until its Eureka Coach division became a separate entity in 1980.

One reason A.H.A’s name has remained a “secret” is that until 1984, A.H.A sold the majority of its limousines to firms that then rebranded the vehicles under their own labels. Merging with two other businesses in April of 1984 to become A.H A Automotive Technologies Corp, the firm then began direct sales of its limousines under the A.H.A brand name. That same year, Stein took his new corporation public (A.H.A is traded on the Toronto Stock Exchange), explained A.H.A’s executive vice president, Blaine Hobson.

The Canadian company’s newest product line is the Lincoln Formal, a standard-wheel base limousine built on the Lincoln Town Car. Originally designed by A H.A for use by busi­ness executives and corporations, the firm’s clientele for the vehicle has vastly changed. “It turned out our market was completely different,” related Hobson. Corporations have bought a few, but the vast majority of sales, over 70 percent, are to livery services for airport-shuttle work and other uses. Business people can be picked up at the airport and work at the desk in the car’s rear while the driver takes them to their out-of-town meetings.” Hobson concluded, “The ‘non-limo corporate limo’ is perceived by the livery services as very practical, and appears to be an idea whose time has come.”

Hobson anticipates that the firm will build 600 of the Lincoln Formals in 1986, compared to the 400 to 500 stretch limousines the Canadian company plans for this model year. A.H.A also builds two stretch limousine models, the ‘extended wheel- base A H.A Lincoln Stratford - built either as a 50-inch single-cut or as a 56-inch double-cut model on a Lincoln chassis - and the 44-inch extended-wheelbase A.H.A St. Moritz created on the Mercedes Benz 126 chassis.

Rapidly growing since the firm’s major changes in 1984, A.H.A Automotive Technologies Corp’s successes include its limousine line as well as its other automotive division which manufactures travel vans, vehicles for the handicapped, and ambulances. The firm has rapidly grown from sales of $4 million in 1984 to $23 million in 1985, with a projected $44 million in sales during 1986. In the same period, A.H.A’s production has grown from a mere five units a month to over 100 units a month.

A.H.A Automotive Technologies Corp.’s dynamic success can be traced to a few basic tenets upon which the firm is based. Hobson explained, “Our marketing philosophy is to price into the value-equation-that the quality of the product received for the price paid is a direct indication of value.” He continued, “The combination of product quality and the limousine package as purchased is priced to create the highest value for the consumer.

“Seventy-five percent of our limousine customers are people buying themselves a business,” said Hobson. “For a livery business to succeed, the limousine must be well-built, durable and serviceable.

The average A H.A limousine currently in use in Toronto has over 300,000 miles on it. That is because we build a solid unit, and the livery owner can get a rebuilt engine fairly inexpensively,” Hobson explained. “Our limousines’ quality and pricing make it possible for the small businessperson to own their own company and to succeed.”

According to Hobson, “The Canadian limousine market tends to be more conservative than the United States marketplace. There are three key factors which the limousine buyer is concerned about. These are: reliability, will the limousine last for hundreds of thousands of miles and many years, and not need to be replaced; minimal service and maintenance needs; and an affordable going-in price, ensuring profits for the buyer.” Hobson added, “If a customer can make a reasonable profit from buying an A.H.A limousine, then he will return.”

Repeat customers are a central element in the Canadian firm’s successful growth. A.H.A’s customers are from two countries - Canada and the United States. Currently, over 80 percent of the firm’s Canadian business is from repeat customers, while in the United States, between 40 and 50 percent of the company’s business is from repeat buyers. ‘Once we have a customer we don’t lose them,” Hobson commented. “That’s because our limousines are at the bottom of the industry’s price structure, with excellent quality.

“One of our regular customers once joked that you could leave an A.H.A limousine in a field somewhere and 20 years from now all that would be left would be the extended section, while the rest would have decomposed.” Hobson said with a laugh.

Remarked Hobson, “We think of our buyers as people who work for A.H.A they are part of the ‘family’. Our buyers generate money for A.H.A by purchasing our limousines for use in their businesses, therefore it is essential that they make a good living. Their business keeps us in business.”

A.H.A’s limousines are “engineered-built,” according to Hobson. Basing their limousine production on an “engineered product” concept, as opposed to individually hand-crafting each limousine, means that all A.H.A limousine parts are identical. “This design precept is utilized in all our production lines,” said Hobson. “Being able to instantly interchange a side panel, a privacy divider, or any other part with a replacement facilitates the servicing of our limousines for the buyer. An individually hand-crafted limousine would demand hand-built replacement parts, naturally at a greater cost.”

As an example, Hobson described a common maintenance need for limousine buyers - the replacement of a broken rear window. “Most manufacturers’ limousine designs are such that if the rear window breaks, the entire roof must be taken off merely to replace the window. On all our limousines, the rear window itself can be easily removed in 15 minutes from within the car at a servicing cost of approximately $50. Most hand-built limousine firms would charge between $500 and $1,000 because of the cost incurred for roof removal.”

The quality of limousines engineered by the firm and their high value, low-pricing philosophy is affected by the monetary rate of exchange between Canada and the United States. “With the exchange rate as it is now,” commented Hobson, “our cost of labor is lower than if we had built in the United States.”

A.H.A’s dedication to producing quality limousines that are “value priced” is proving to be successful. Distributing their limousines through “exclusive A.H.A dealers,” the firm- has found a receptive marketplace for their limousines in the United States.”

“Nearly 90 percent of our sales are to the United States, with the remainder in Canada,” said Hobson. “Rather than selling to the overseas market, we like keeping our sales close to home. This enables us to better adhere to the changing laws and regulations regarding the industry, and to have a better understanding of our customer’s needs.

“We are currently looking to expand our dealer-network to new areas within the United States,” concludes Hobson. “We anticipate having more than 20 A.H.A dealers by the end of 1986.”

Four of A.H.A’s key dealerships in the United States, Chicago’s Limousine Store of Illinois; New York’s Limousine Salon, the Limousine Store West in Los Angeles, and Boston’s New England Coach exclusively sell A.H.A limousines. Hobson explained, “Selling directly to the customer enables our dealers to better service their customer’s needs. Maintenance on the A.H.A sections of the limousines as well as a certain amount of chassis warranty work is available at all dealerships.”

Brett O’Dell, president of the Limousine Store in Illinois said, “I’ve been in the limousine business for over five years. I used to have 25 limousines built by another one of the industry’s ‘Big Five.’ I switched. A.H.A’s qualify control is 100 percent better, and my clients are happier. These limousines don’t break down like the others did.”

Vince Cuti, general manager of the Limousine Salon commented, “A.H.A doesn’t build its limousines by putting them up on floor-jacks like many ‘hand-crafted limousine’ companies do. A.H.A uses advanced technology in building its limousines and I like the preciseness this produces.” Cuti concluded that, “A.H.A limousines have proven to be ‘work-horses.’ Both our livery customers and the private individuals bringing their own cars in on trade-ins for an A.H.A limousine agree, these limousines are an excellent value for the money. Why else would we exclusively sell A.H.A limousines? We want to make a living too.”

Related Topics: A.H.A. Manufacturing, Blaine Hobson, Canadian limousine market, coach-builder profiles

Comments ( 2 )
More Stories