Baird Report: Strong Shipment Results Continue

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Editor’s Note: Robert W. Baird & Co. issued a client newsletter following publication of the April wholesale deliveries report from the Recreation Vehicle Industry Association (RVIA). Excerpts of the Baird advisory follow:

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April shipments improve 90%. The robust wholesale RV recovery continued in April with an 83% increase in towable shipments and a 167% increase in motorhomes. Strong wholesale growth continues to be driven by the bullwhip effect of easy comps and better inventory replenishment rates. We expect strong shipment results to continue as dealers replenish inventory at closer to a 1:1 ratio. To sustain the recovery, however, we are looking for retail demand to improve.

Summary

Total RV wholesale shipments up 90%. Shipments grew again in April as stronger inventory replenishment rates drove shipment growth in both motorhomes and towables.

Motorhome shipments increased 167%. Class A shipments grew 267% while Class C shipments grew 117%. Easy comps and better restocking rates drove strong wholesale growth. Motorhome shipment growth accelerated in April and total shipments are up 148% year-to-date.

Towable shipments grew 83%. Travel trailer shipments increased 82% while fifth-wheel shipments increased 87%.

Dealer inventory. Dealer inventory is at comfortable levels in both motorhomes and towables. We believe strict floorplan lending rules will prevent excess buildup of inventory ahead of retail sell-though — but note that normal restocking rates should continue to drive strong shipment results through the early selling season.

SAAR. We calculate a seasonally adjusted annual rate of shipments. The SAAR of motorhome shipments improved to 25.6K units in April, from 21.4K units in March. The SAAR of towable shipments decreased slightly to 196.9K units in April, from 199.6K units in March.