GE Capital: RV Industry Enjoys Increased Sales
Recreational vehicle manufacturers are seeing double-digit growth and RV dealers are selling through products at an increasing rate, said GE Capital, Commercial Distribution Finance (CDF).
According to a press release, that’s consistent with the positive activity seen in the U.S. middle market overall, according to the National Center for the Middle Market (NCMM), a partnership between GE Capital and The Ohio State University Fischer College of Business. The mid-market consists of approximately 200,000 companies with revenues of $10 million to $1 billion, which includes many participants in the RV industry.
“As the U.S. economy continues to experience slow and consistent growth, growing consumer confidence is spurring retail sales of RVs,” said Tim Hyland, president of CDF’s RV group. “We expect that the industry will remain on a growth trajectory through the 2014 selling season. That’s supported by the information gathered by the NCMM.”
Despite harsh weather in the spring that affected retail activity in some regions, RV dealers are turning their inventory at a healthy rate of more than 2X. Turnover is a ratio showing how many times a dealer’s inventory is sold and replaced annually. Another measure of dealer health is aging — the ratio of inventory less than one year old to the amount greater than one year old. This ratio shows that aging has steadily declined over the past two years, maintaining a very positive level of less than 10%.
The mid-market reported sustained increases in revenues and employment during the second quarter, reversing declines seen earlier in the year, said the NCMM in its second quarter Middle Market Indicator. Stabilizing top-line growth and increased employment are fortifying optimism in the RV industry and in the broader economy.
Strong and lasting growth and revenue performance in the middle market is fueling increased confidence in the national and global economies. Business leaders expect revenue growth to continue, and they expect to add jobs at a more rapid pace over the next 12 months.
“Dealers have been prudent in their stocking behavior over the past several years,” Hyland noted, “but we’re seeing signs that they are gaining confidence, which aligns with the overall sentiment in the mid-market. As a result, the ordering and stocking levels may increase as dealers seek to avoid missing sales opportunities in a market that continues to improve.”
CDF has supported the RV industry with flexible inventory financing products for more than 30 years. Inventory financing, also known as floorplan financing, allows dealers to stock, market and sell a wide variety of products from RV manufacturers.
CDF also tracks trends in the RV industry related to inventory finance through its network of independent dealers, then reports on those trends to create awareness and understanding of market dynamics. It has significantly expanded its analysis over the past several years; it now provides manufacturers and their dealer customers with a robust array of performance statistics, which are available via CDF’s proprietary online business intelligence tools.