Posts Tagged ‘fifth wheels’

“The fuel prices don’t really impact RV sales quite the way a lot of people might think,” Kevin Broom, director of media relations for the Recreation Vehicle Industry Association (RVIA), said. “Part of it is there’s so much savings already built into RVs that stay when fuel prices rise.”

The RVIA had San Francisco-based PKF Consulting look into that question, Broom said, and it concluded that fuel prices would have to get to nearly $10 a gallon before the most expensive RV — a Class A motorhome — would lose its economic advantage.

For travel trailers, fifth-wheels and folding campers, gas prices would have to rise to $15 to $20 a gallon before those vehicles lose their economic value, Broom said.

People may take shorter trips, Broom said, but people will still use them.

Rising fuel prices, though, can enter into the equation in other ways. The biggest is if they affect consumer confidence, he said. Another factor is the availability of consumer credit, which greatly affected RV sales in 2008.

In the recession, fuel prices did go up, but Broom noted, consumer confidence and credit availability were other key factors.

“There were so many things going on,” Broom said. “Fuel prices did go up, but at the same time we had home foreclosures and a credit freeze and this massive recession that went on. “Did RV sales drop because fuel prices went up or was it because there was this massive economic cataclysm?”

It’s hard to separate each factor, Broom said. “My guess would be that those larger economic factors like decline in home prices, like people losing employment, just the availability of credit,” he said. “Those were probably bigger factors than fuel prices.”

As it is, University of Michigan economist Richard Curtin is predicting a 5.1% increase for RV sales for the year in the spring issue of RV Roadsigns.

Curtin predicts RV shipments will reach 265,200 for 2012, which would be the third straight year of increased sales.

Curtin cited stronger economic growth, increased job opportunities and easing consumer credit as factors.

“We’re encouraged by that,” Broom said. “The economy is showing signs of growing, of recovering.”

The  Recreation Vehicle Industry Association (RVIA) reported wholesale shipments of all RVs were 19,100 units for October 2011 which was ahead of last month by 12.4% and 15.1% ahead of this same month last year.

Gains were recorded in both conventional travel trailers and fifth-wheels while other categories were even with or slightly less than the totals reported for those categories in October 2010.

Year-to-date, total shipments rose to 219,100 units through October this year, up 4% from this same 10-month period last year. Towable RV units increased by 4.3% while motorhomes were up 1.4% through October. On a seasonally adjusted basis, all RV shipments were at an annualized rate of 247,800 units through October this year.

The recreational vehicle industry and the housing market traveled much of the same road during the last decade.

And when the housing market crashed, the RV industry suffered a similar fate.

Now the RV business model has changed dramatically: Much like the housing market, bigger no longer is necessarily better.

Bus-like gas and diesel motorhomes — many carrying six-figure price tags — dominated dealer inventory five or six years ago. Today, north state lots are full of fifth-wheels and travel trailers.

“The mix for big dealers used to be 70 percent of sales would be motorhomes. . . . Now it’s 30 percent motorhomes and 70 percent fifth-wheel and travel trailers,” said Wayne Barnes, owner of B&B RV Center in Anderson, California.

Not only do the smaller RVs cost a fraction of a new motorhome, but there can be a savings in gas to pull a trailer.

“There was a time that if we saw one tent trailer a month, that was a lot. Now we have two or three tent trailers coming in to be repaired,” said Tom Williams, who has owned Northern Trailer & RV Supply in Redding since 1974.

While the RV industry is still down from its peak in the middle of last decade, sales have started to rebound.

The RV Dealers Association expects 260,200 units to be shipped in 2011, a 7 percent increase over 2010, but down from the 390,500 motorhomes and travel trailers that were shipped in 2006.

“It has become more of a motorized towable industry,” RV Dealers Association spokesman Phil Ingrassia said. “It used to be that between 20 and 25 percent of RV shipments were motorhomes. Now it’s less than 10 percent.”

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