European RV Builder Sees 18-Month Decline
Hymer AG, which has been making recreational vehicles since the 1930s and is one of Europe’s leading motorhome builders, predicted demand for motorhomes and trailers won’t improve for 18 months, forcing the German company to cut costs and reduce its work force, according to Bloomberg News.
“The situation is strained,” Hermann Pfaff, the management board member responsible for finance and distribution, said in a telephone interview from Bad Waldsee, where the company is based. “We have to cut personnel costs.”
Hymer posted a net loss of $25.9 million for the first half of its fiscal year ending Feb. 28 after sales fell 28%. The European caravan (RV) market shrank 20% in the past months, he said.
The economy of Europe, where Hymer makes 94% of its sales, will shrink 4% this year, according to the European Commission. The company predicts motorhome makers to sell 120,000 vehicles in Europe this year, compared with 191,000 last year as dealers run down inventories.
Hymer has reduced its work force, including temporary staff, by 10% to about 3,150, Pfaff said. The company forecasts a second-half operating profit excluding one-time costs for job cuts after posting a loss in the first six months. A third of factory employees are working shorter hours.
“We don’t expect unit sales to increase,” said Pfaff, one of Hymer’s two management board members. “They’ll stay at this level for the next 1 1/2 years. People have done cruises, flown and traveled everywhere. Now they want motorhomes.”