KONINGSHOOIKT, Belgium European bus builder Van Hool NV and its North American distributor, ABC Companies of Faribault, Minn., plan to introduce a "low-cost" motorcoach to the U.S. market, with Van Hool building a plant in Macedonia to assembly the coaches.

Van Hool and ABC expect to sell 300 of the low-cost coaches during the first three years after they are introduced.

In announcing its plans, Van Hool said ABC had prevailed on it move into what it calls the "growing, low-cost vehicle segment."

"This market segment is becoming increasingly successful due to local production and imports from China and Mexico, among others," Van Hool said in a statement issued last month. "Manufacture of this type of product in Belgium is impossible due to the much higher labor costs."

Van Hool added that it was "necessary" to enter the low-cost segment "to retain and expand its current important position in the American market."

"In America, the low-cost vehicle segment is growing very quickly," said Filip Van Hool, executive director of the company bearing his family name. "Our very healthy ambition is to play a significant role in this, and thus retain and even expand our position in the global American market.

"Without this important foreign investment Van Hools position in the American market was under threat," Van Hool said.

Van Hool said it picked a location in Macedonia, near the capital city of Skopje, after conducting an in-depth feasibility study.

For the geographically challenged, the Republic of Macedonia is in the central Balkans of southeast Europe. It is one of the successor states of the former Yugoslavia, from which it declared independence twenty years ago.

A landlocked country, Macedonia is bordered by Kosovo to the northwest, Serbia to the north, Bulgaria to the east, Greece to the south and Albania to the west. Skopje, the capital, has roughly a half-million residents.

Macedonia remained largely peaceful through the Yugoslav wars of the early 1990s but it was seriously destabilized by the Kosovo War in 1999, when an estimated 360,000 ethnic Albanian refugees fled to Macedonia.

Most of the refugees left after the war but Albanian nationalists on both sides of the border took up arms in pursuit of independence for the Albanian-populated areas of Macedonia.

The Albanian insurgents and government soldiers fought a short civil war in the north and west of the country between March and June 2001. NATO intervened, resulting in a ceasefire and relative calm. Since then, efforts have been made to provide greater political power and cultural recognition to the Albanian minority.

The Van Hool announcement did not provide a timetable for when its plant in Macedonia would be built.

"ABC is proud to support and share the long-term vision of our valued Van Hool partner," said Dane Cornell, president and CEO of ABC Companies. Van Hool owns 35 percent of ABC.

"We are excited about this decision to expand production capacity, which was solely driven by our shared vision to invest in the North American market," said Dane Cornell, president and CEO of ABC Companies. Van Hool owns 35 percent of ABC.

"The commitment to increasing their manufacturing capabilities directly correlates with growing U.S. demand for European technology that enables American operators to continuously evolve and innovate fleet operations," Cornell added.

Cornells comments were included in a statement from ABC, noting that the new plant will enable Van Hool to continue to deliver products that offer North American operators "consistent long-term pricing and greater scalability, as well as reduced cycle time from order to delivery."

The Van Hool announcement essentially confirms reports that have circulated in the U.S. motorcoach industry for months that ABC was investigating importing a lower-cost motorcoach to fill the void left by the collapse of Bus & Coach International and its BCI Falcon, and to compete with the Volvo 9700, which is built in Mexico, and meet competition from others who import coaches from countries with lower wage rates, notably China, Turkey and Brazil.

The announcement from Van Hool was coupled with a statement that ABC also has committed to buy and distribute 210 Van Hool coaches made in Belgium. These would primarily be Van Hool models ABC has been distributing in recent years, including the C2045, the T2145 and the TD925.

"Over the next few years, 210 coaches will be built in Belgium for the American market," said Van Hool. "Without the investment in a new manufacturing plant abroad, Van Hool would never have won this order," the bus builder noted.

The No. 1 North American customer for Van Hool/ABC has become megabus.com, which buys double-decker TD925 model Van Hools by the boat load. In December, Stagecoach Group, the Perth, Scotland-based parent company of megabus and Coach USA/Coach Canada, announced it planned to purchase 95 more double-decker Van Hools this year for its North American network.

The $62.6 million purchase, or roughly $660,000 per coach, calls for the 81-seat coaches to be delivered between now and summer.

Many of them will run out of megabus newest hub, in Atlanta, to 11 cities in Alabama, North Carolina, Tennessee, Florida and Georgia. megabus now links 72 cities in the U.S. and Canada. The Atlanta hub is operated under contract by Coach America.

In addition to buses and coaches, Van Hool produces industrial vehicles, primarily tank and truck trailers. Established 65 years ago, it is based in Koningshooikt and employs more than 4,000 people, most of who work at manufacturing plants in Koningshooikt and Bree.