RVIA: Rising Fuel Prices Won’t Deter RV Purchases
Despite the rapid increase in gas prices the past few weeks, a spokesman for the recreational vehicle industry believes it will not directly affect RV sales.
As reported by the South Bend (Ind.) Tribune, the RV market is coming off of a 5.1% increase in RV wholesale shipments in January compared with the same month a year ago, according to the Recreation Vehicle Industry Association (RVIA).
The RV industry employs more than 24,000 people in Elkhart County, including RV manufacturers and suppliers. Northern Indiana builds 82% of all recreational vehicles in the U.S., according to RVIA.
“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 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.”