Baird: Towable RV Inventory Dropped in Q3
Editor’s Note: Robert W. Baird & Associates issued a client newsletter following last week’s release of the October wholesale shipment figures by the Recreation Vehicle Industry Association (RVIA). Excerpts of the Baird newsletter follow.
October shipments flat. Motorhome shipments increased 29%, while towable shipments fell 3%. Shipments have slowed recently, but it is the off-season and dealers are closely watching inventory levels heading into the winter. We expect weaker wholesale results through winter due to tough comps and prudent inventory management. The most recent RVIA forecast calls for RV wholesale growth of 43% in 2010 (vs. +53% YTD) and +4% in 2011.
Total RV wholesale shipments flat. Overall shipments were flat in October (+56% YTD) as growth in motorhomes was offset by declines in towables. Shipment growth decelerated through late summer and into fall as retail slowed and dealers manage inventory levels ahead of the slower winter season.
Motorhome shipments increased 29% (+116% YTD). Class A shipments increased 38% while Class C shipments increased 17%. We expect motorhome shipment growth to slow heading into winter on more difficult comps and a lower replenishment rate.
Towable shipments fell 3% (+51% YTD). Travel trailer shipments dropped 2% and fifth-wheel shipments decreased 5%. Towable shipments declined for the second consecutive month, but 2010 shipment levels remain significantly above 2009. Towable shipments moderated throughout the summer as dealers reduced inventory. Based on the most recent data, we estimate dealers reduced inventory by over 7K units (July-September).
SAAR. We calculate a seasonally adjusted annual rate of shipments. The SAAR of motorhome shipments dropped to 22.3K units in October, from 22.7K units in September. The SAAR of towable shipments fell to 166.4K units in October, from 170.6K units in September.
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