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Baird: Uncertain Economy Impacts Coach Sales

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August 19, 2011 by   Leave a Comment

Editor’s Note: Robert W. Baird & Co. issued a client newsletter following the June motorhome sales report from Statistical Surveys Inc. Excerpts from the Baird newsletter follow.

U.S. motorhome demand down in June. Motorhome sales fell 2% in June, according to Statistical Surveys Inc. We believe elevated gas prices, unfavorable weather and weak consumer confidence put pressure on results. Facing an uncertain economy in the back half of 2011, consumers seem less likely to buy and dealers are less likely to stock – leading to potentially fewer RV orders.

Motorhome retail registrations in the U.S. fell 2% in June. Class A registrations increased 2%, while Class C registrations fell 5%. High gas prices and low consumer confidence hurt demand.

Gas/Diesel. Class A-Gas growth (+15%) continues to support weak demand for Class A-Diesel units (-13%).

Retail SAAR. The seasonally adjusted annual rate of motorhome retail registrations for June before revisions, fell to 18.0K units, from 20.6K units in May. In 2010, U.S. dealers sold 19.5K motorhomes.

Dealer inventory. Motorhome dealer inventory bottomed a year ago, and in 2010 wholesale unit shipments outpaced retail sales by roughly 6%. Dealers increased inventory just slightly in June, and for the balance of the year, we expect dealers to manage inventory more conservatively as confidence deteriorates.

Important note. Data for certain months is incomplete due to reporting delays from Maine and Minnesota. We caution against attaching undue significance to data from a single month. The data tend to fluctuate from month to month, and are frequently revised.

This summary of a Baird research report is not intended as investment advice. To participate in Baird surveys and receive research reports, contact Craig R. Kennison, CFA, at ckennison@rwbaird.com.

 

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