Posts Tagged ‘RV Dealers Association’

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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SOUTH BEND — Volatile gasoline prices could hamper the recreational vehicle industry’s attempts to recover from a deep downturn caused by the recession because sales of the big ticket items are so dependent on consumer confidence, industry executives and analysts say.

“High fuel prices and rapid fluctuation of fuel prices are not good for consumer confidence,” said Mark Bowersox, Recreation Vehicle Indiana Council executive director. “When you see fuel go up 10 or 15 cents a week or 50 cents in six weeks, that’s a concern.”

Morningstar analyst David Whiston, who focuses on Winnebago, said uncertainty in fuel costs, not the actual cost, is the biggest concern.

“I think it’s more the volatility that would cause consumers to stay out of the showroom than the level itself,” he said.

He points to the fact that high gas prices don’t keep people from buying RVs in Europe, where gas prices are higher.

Phil Ingrassia, vice president for communications for the RV Dealers Association, said it’s too early to say whether gas prices will have an impact on RV sales because it’s impossible to predict how long gas prices will stay erratic. He said he isn’t aware of any change in the forecast in RV sales, but said stability would help.

“When people feel secure about their jobs that bodes well. As the economy improves, so do RV sales,” he said.

Bowersox said because recreational vehicles are a discretionary purchase, people look for stability before making such a large purchase. He said gas prices are more likely to change how people use their RVs.

“People might take fewer trips or stay closer to home, but the demand is still there for the product and they will adjust,” he said. “If gas prices stabilize, the market should look real good into April, May and June. If they bounce around like a yo-yo, then that’s a cause for concern going forward.”

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