More Good News for the RV Industry!
Wed Nov 4, 2009
Author: Marilyn Odendahl
Source: etruth.come
In more signs the recreational vehicle industry may be recovering, wholesale shipments again outpaced the previous year and one local motorhome maker announced plans to increase production and recall workers.
A total of 17,400 units were shipped to dealers during September, a 13 percent increase over the 15,400 shipped in September 2008, according to the Recreation Vehicle Industry Association. This is the second month the RV industry has entered positive territory, with August shipments posting a year-over-year gain for the first time in nearly two years.
Towables led the surge, topping year-over-year numbers by 17.5 percent. Motorhomes, on the other hand, trailed September 2008 shipments by 23.5 percent; but Craig Kennison, analyst with Baird & Co., noted the decline in motorized shipments is moderating.
Reviewing Winnebago's most recent quarterly performance, Kennison sees evidence dealer lots are empty and inventory levels are set to rebound. Although he contended the manufacturer's potential earnings may be overstated in the recovery scenario, Kennison anticipates a "robust cyclical recovery as demand improves and dealers rebuild inventory."
EXPANDING
Local RV maker Gulf Stream Coach is "pretty optimistic" and believes the current market has more demand than supply, according to Claude Donati, vice president of Gulf Stream and GulfTran. Part of the upswing comes from fewer motorhome manufacturers crowding the field, with about five companies remaining from the eight or nine that were in business when the economic recession hit, Donati said.
To meet demand, the Nappanee facility will be hiring about 50 production workers and increasing its manufacturing by 50 percent next week, followed by a 25 percent increase after the National RV Trade Show in Louisville in early December, Donati said. The company even expects the number of orders to keep the motorized division busy enough that employees will not be given extra time off during the holidays.
STILL DOWN
Despite the September shipment results, the year-to-date numbers show the RV industry lags behind 2008 by 42.7 percent. In cumulative shipments from January through September, towables are down 39.7 percent and motorhomes have dropped 64.8 percent compared to the same period in 2008.
Winnebago's retail unit sales fell 23 percent in the quarter, indicating to Kennison the RV industry remains weak because of the economy.
Gulf Stream reads the market as wanting more affordable units since consumers are under pressure to make a bigger down payment when buying. To meet that demand, its 2010 offerings will include a line of lower-priced models of its popular brands like Conquest and Sun Voyager, Donati said. The company has removed some options that buyers do not consider absolutely necessary in these units and reduced the retail price by 15 percent to 20 percent.
Also Gulf Stream is focusing on building gasoline-powered motorhomes because, Donati said, the market appears to be saturated with diesel pushers.
The economic downturn forced the company to cut a majority of the workers on the motorized production line, Donati said. Consequently, before rehiring and building more units, Gulf Stream waited until it was sure "our legs were underneath us" and the turn-around is real.
"We think supply and demand is going to drive this" recovery, Donati said. "Supply and demand is in our favor."
TOTAL RV SHIPMENTS
2008 2009
January 24,900 7,300
February 27,600 10,300
March 30,100 12,800
April 31,400 13,300
May 25,000 13,300
June 23,500 15,700
July 17,100 13,500
August 16,900 17,800
September 15,400 17,400
Source: Recreation Vehicle Industry Association
