Baird Poll: Half Report Sales Below Expectations
In its recently released “Q2 RV Dealer Survey,” investment firm Robert W. Baird & Co. Inc. found that demand remains soft and lot inventory is falling as RV dealers reduce orders. Retailers remain reluctant to order as higher interest rates have discouraged trade-ins.
Milwaukee-based Baird polled 86 dealers to gauge retail trends, inventories, promotional activity and 2007 expectations heading into the third quarter.
• Retail: Demand remained weak in Q2 as higher interest rates continue to weigh trade-in activity. Motorhome sales fell 0-4% while towable sales fell 2-6%, according to dealers. July trends are mixed so far, with roughly 50% of dealers reporting that sales fell below expectations and 35% reporting better-than-expected results.
• Traffic: Traffic on dealer lots fell in Q2 versus last year — especially in April.
• Inventory: Dealers remain reluctant to stock inventory due to slower retail demand and higher floorplan costs. Nonetheless, inventory continues to fall. The number of days of inventory fell to 122 days from 129 days in motorhomes and 98 days from 115 days in towables — a positive trend.
• Orders: To keep inventories low, dealers plan to order fewer motorhomes (-6-10%) and towables (-2-6%) during the next six months.
• Pricing: Promotional activity is below average as manufacturers appear to have adjusted to the weaker environment.
• Sentiment: Dealer sentiment is mixed as current conditions remain unfavorable. Dealers are somewhat pessimistic about the present environment (44 on 1-100 scale, up from 43 in April) but remain optimistic about the 3-5 year outlook (61 on 1-100 scale, down from 72 in April).