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Baird: Expect Strong Shipment Results to Continue

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December 30, 2009 by   Leave a Comment

baird_new_logoEditor’s Note: Robert W. Baird & Co. issued this client note on Tuesday (Dec. 29) following the release of the November wholesale report by the Recreation Vehicle Industry Association (RVIA).

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November shipments recover versus easy comps. Total shipments increased 137% in November, on a 149% increase in towable shipments and a 57% increase in motorhomes. These large increases were expected, as the seasonally weak year-end period was especially weak last year. We expect strong shipment results to continue as comps remain easy throughout winter and the dealers begin to restock inventory at more normal rates.

Summary

  • Total RV wholesale shipments up 137%. Shipments increased in November as the destocking trend has run its course and we begin to annualize the weakest months of last year.
  • Motorhome shipments increased 57%. Class A shipments grew 25% while Class C shipments doubled. While this is an encouraging data point, the gains come off of historically low shipment levels. For perspective, motorhome shipments in November remain down 65% from 2007.
  • Towable shipments grew 149%. Travel trailer shipments increased 144% while fifth-wheel increased 162%. Towable shipments continue to improve, increasing significantly on the most favorable comparison of the year.
  • Dealer inventory. Shipments have begun to come into line with retail in both motorhomes and towables. Recent indications suggest that dealers may even be beginning to increase inventories of the lower-priced, faster-turning towable product, driving strong shipment growth. Both Winnebago Industries Inc. and Thor Industries Inc. recently reported strong backlogs, further suggesting dealers are beginning to reorder at a more normal rate.
  • We calculate a seasonally adjusted annual rate of shipments (SAAT). The SAAR of motorhome shipments increased to 18.4K units in November, up from 17.9K units in October. The SAAR of towable shipments increased to 183.6K units in November from 169.1K units in October. Both have trended significantly higher YTD. (When referring to motorhomes, we generally mean Class A and Class C motorhomes (excluding Class B). When referring to towables, we generally mean fifth-wheels and travel trailers (excluding truck campers and folding campers). When referring to RVs, we generally mean Class A, Class C, fifth-wheels and travel trailers. These refined classifications provide better comparisons to the companies we cover.)
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