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Industry Buoyed by Strong Late Year Results
Posted By RVBusiness On January 28, 2011 @ 1:50 pm In Breaking News | No Comments
RV industry leaders were buoyed by a late year wholesale shipment surge — a strong December that pushed 2010 North American shipments to 242,300 units — a 45.6% gain over 2009.
The late-year shipment gains were led once again by travel trailers and fifth-wheels, which were up 23.8% and 24.2%, respectively, for the month of December and 42.4% and 48.6% for the year.
Total December shipments of 18,300 units, according to the Recreation Vehicle Industry Association (RVIA), were 30.7% higher than the same month last year.
“If we go back to early 2010, could anybody have predicted that kind of growth?” asks Jayco Inc. President Derald Bontrager. “I’m not sure. I don’t think so. I think it caught a lot of people by surprise, and I think it’s an indication of how mainstream the RV lifestyle’s become in America. You know, it’s a desired lifestyle, and there’s a lot of pent up demand out there.”
The greatest strength in terms of towable sales for Middlebury, Ind.-based Jayco, says Bontrager, is in the entry level towables– certainly more so than before the recession. “Oh yes,” he added, “we’ve seen a shift in volumes toward entry level products. We can thank the recession for that. I think that it’s caused everybody to rethink their priorities in terms of how they spend their hard earned dollars.”
RVIA Vice President of Administration Robert “Mac” Bryan had expected a strong showing for 2010. ”I had anticipated a good month of December would be 15,000 (units shipped),” said Bryan. “But 18,000 was quite a surprise to me — obviously a pleasant surprise.”
“If it tells us anything,” asserts Gregg Fore, president of Elkhart, Ind.-based Dicor Corp. and current chairman of RVIA, “it tells us that inventory balance is pretty good in the market between dealers and retail and that the attitude we saw at the (Louisville) show in December from dealers has played out – that they’re a pretty positive bunch going into the spring shows based on their actions at Louisville. And that’s playing out in January.
“That balance has created an environment where wholesale financing is more efficient,” noted Fore, adding that the year-end results exceeded his own projections. “That’s what balance creates for you. It also tells us the volume level in the 240,000 (unit) range is pretty sustainable. That’s probably the most important thing it tells us.”
Also expecting good news in the year-end shipment reports was RV builder Keystone RV Co. Inc., a Goshen, Ind., Thor division for which 2010 production – without revealing actual numbers – clearly outpaced 2009’s and employment has rebounded to pre-recessionary levels of about 3,000 workers.
”We were thrilled to see (the shipment numbers),” noted Keystone President Bob Martin. ”It was great to see the industry numbers going up. It’s always interesting to gauge how the rest of the industry is doing.”
Based on his own company’s retail activity, Ed Kinney, vice president of sales and marketing for Carriage Inc., Millersburg, Ind., expected the positive year-end numbers. “Absolutely,” said Kinney. “I think that things are in place for the industry to really turn around, and this year’s going to be great.”
Towable strength is something Carriage has been consistently seeing. “Yeah, we’ve seen it a lot the last six months of the year,” added Kinney. “So, towable sales are strong. Our business in the emerging luxury fifth-wheel market is extremely strong. We’re seeing things pick up significantly in the shows we’re in right now.”
Meanwhile, Tom Walworth, president of Statistical Surveys Inc., Grand Rapids, Mich., which tracks North American retail sales, suggests that shipments to Canadian dealers played a significant role in December’s positive returns.
“My guess is with the devaluation of the dollar, Canadians are probably snapping up RVs more than they normally would because it’s a better buy,” Walworth said. ”The Canadian numbers exerted a bigger influence than (Richard) Curtin’s original model projected.”
At the same time, Jeff Babcock, national sales manager for Forest River Inc., sees a direct correlation between the late year surge and the emerging strength of National Open House Week, held for the last three years by various Elkhart-area RV builders. He claims the open house has turbocharged the fall stocking programs that already existed.
“It just goes to show that these fall open houses have made an impact on shipments in December. I mean, shipments are up 5,000 units and I would say that a lot of that is attributable to the dealer shows that we did in September and the units that got built as a result in October and November and shipped in December at the year end.
“That just goes to show that dealers think that the best time for an RV show is better than Louisville, where you can’t get the new product to the shows in time,” said Babcock, whose company has played a pivotal role in introducing National Open House Week. “September’s a much better time to have a dealer show, and I think you’re going to see those numbers increase.”
The year-end results in a nutshell for December and the year:
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