RV Industry Enjoys Slight Improvement in 2011
The RV industry pointed today (Nov. 29) to a slight improvement from last year's turnaround performance as another sign the recession-dented sector is on the road to recovery. But a slight speed bump might be on the horizon.
RV makers, dealers and suppliers attending an annual industry trade show were told that 2011 shipments from manufacturers to dealers are expected to be up 2% from last year's 242,300 shipped units. The 2010 total amounted to a 46% gain from 2009, The Associated Press reported.
"You guys sitting in this room today are all survivors in this industry, and I think that bodes very well," said Richard A. Coon, president of the Virginia-based Recreation Vehicle Industry Association (RVIA).
Despite the upswing, the recreational vehicle industry still has considerable ground to cover to catch up with pre-recessionary levels.
In 2007, shipments totaled 353,400 — the fourth-highest figure in the past quarter century. By 2009, shipments slumped to 165,700 units as older RVs parked on dealers' lots drew scant interest from cash-conscious consumers.
Consumers remain jittery by stubbornly high unemployment, sagging home values and a volatile stock market. As a result, the industry is bracing for a projected 2.6% decline in RV shipments in 2012, based on a forecast by University of Michigan economist Richard Curtin.
"It plays with the psyche of those people that are in our target market," said Bob Olson, chairman of RV maker Winnebago Industries Inc.
Despite lackluster consumer confidence, he said, there have been favorable trends — dealer inventories have improved and consumer credit has become more available, especially for less-expensive towable RVs attached to pickups or hitched to the back of another vehicle.
"A lot of tough decisions were made by everybody in that room in order to be here today," Olson said following the trade show's opening session. "You didn't find anybody in the RV industry getting a bailout. We did it the old-fashioned way, with some pretty tough decisions."
Since 2008, the number of RV manufacturers has dropped by 35%, Coon said. The ranks of suppliers fell by 32%.
Everyone had to make adjustments to survive the nation's worst recession since the Great Depression.
Tom Stinnett, an RV dealer in nearby southern Indiana, said he reshuffled his inventory to focus mostly on towables. Before the recession, his lot was divided between towables and more costly stand-alone motorhomes.
Towables cost between $6,000 and $100,000, according to RVIA. Stand-alone motor homes range from $50,000 to as much as $400,000 for top-of-the-line, bus-like vehicles.
Stinnett said his business is profitable again after several "brutal years of downsizing and reorganizing."
"We have nowhere to go but up," he said. "Three years ago, we were very, very worried about making it through this disastrous time."
U.S. Interior Secretary Ken Salazar also gave a pep talk to the industry.
"Your best days are still ahead," he said before briefly touring a sprawling convention hall filled with the industry's newest models.
Salazar said investments in conservation and outdoor recreation would help fuel job growth. He cited a study showing more than 8.4 million U.S. jobs are created every year thanks to outdoor recreation.
In 2010, RV travelers spent nearly 2.3 million nights at national parks, up 10% from 2008, he said.
"RV owners are often great champions for conservation as they know firsthand that the investments we make in our parks, historic sites and other public lands not only allow people to enjoy these incredible places, but they also help grow local economies across the country," Salazar said.
Employment is also on the rebound in the industry.
RV manufacturers and suppliers now employ about 375,000 people, up about 50% since November 2008, according to RVIA. But the overall work force is still down from the more than 500,000 workers before the recession.
The trade show allowed manufacturers to show off their latest models.
California-based manufacturer MVP RV Inc. debuted an all-electric motorhome powered by batteries attached to the chaise.
"It's a bold step for us, but we believe that these are the kind of actions that are necessary to help change the perception of not only the industry but the economic climate overall," said MVP CEO and President Brad Williams.
The all-electric E Tahoe motorhome will cost more than the conventional version, but pricing hasn't been announced for the hybrid, which is expected to reach dealers' lots by mid-2012 .The E Tahoe can travel up to 200 miles on a charge.