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Walworth: OEMs Need to Focus on Market Share

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March 19, 2009 by   Leave a Comment

With unit sales for motorized and towable RVs experiencing sharp declines for 2008 – down 41.6% and 23%, respectively – manufacturers are engaged in a battle for market share that could determine their viability once sales recover.

Tom Walworth, president of Statistical Surveys Inc., maintains that line of strategy requires manufacturers to look past current conditions and concentrate almost solely on market penetration.

“Significant unit growth will be hard to find in this type of market,” said Walworth, whose Grand Rapids, Mich.-based company regularly tracks retail registrations. “Market share is the area where manufacturers need to focus this year. When sales are down, the companies that can effectively increase market share will see higher unit sales once the market comes back – and it will come back.”

Walworth said that improving market penetration had to be accomplished through “granular steps” – working from the bottom up to improve the bottom line.

“OEMs have to be judging and assessing their companies right now,” he said. “They need to take another tack with this market, although the same principles still hold up – gain market penetration and shelf space on dealer lots.

“Builders have to fight for market share on a national level, but that has to be approached by going dealer by dealer, state by state and then region by region. It requires getting your entire company moving in the same direction while constantly monitoring progress to make sure what you are doing is making impact. That’s how the war will be won.”

Walworth offered specific examples of companies that were able to aggressively capture market share during last year’s contracting market.

Among motorized manufacturers, market share leader Winnebago Industries Inc. posted a 41.7% drop in unit sales for the year – comparable to the industry average – but only lost one-tenth of a percentage point in market share. “Basically, they were able to stay even with the market,” Walworth said.

Other manufacturers making notable market share gains in the motorized sector were: Thor Industries Inc. (10.5%), Tiffin Motorhomes Inc. (11.8%) and Jayco Inc. (12.2%).

On the towable side, unit leader Thor showed a 3.9% market share gain. Other companies showing noted improvement included: Heartland Recreational Vehicles LLC (89.3%), Jayco (4.7%,), KZRV LP (27.8%) and Palomino RV (17.1%).

“Just staying in business in this environment is an accomplishment,” Walworth said. “But the companies that are really doing things right are outperforming the market.”

Walworth noted that in addition to tactical adjustments, navigating in the down market also requires the proper attitude.

“I talk to so many people that have their heads down and are zoned in on all the negative news,” he said. “People have to live in this market, and the only way to do that is to keep moving forward and not give up.”

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