Industry Sees Good Signs in Spring ’12 Market
Going back to late 2011 and the jittery nerves that prevailed among many Americans over 2012’s economic prospects, few would have predicted some of the promising signs of fiscal recovery that the U.S. economy – and the RV arena – are experiencing this spring to the extent that some RV builders are cautiously upping their forecasts for the year at hand.
While no one is pretending that the post-recessionary era is over, the general economic picture has clearly taken a turn for the better as big automotive dealer groups up their forecasts and gas prices ease and many RV builders and suppliers wake up to a world that is somewhat brighter than they might have thought a few months ago.
“I would say that it’s stronger than we would have anticipated definitely six months ago,” says Andy Baer, vice president of sales and marketing for KZ RV LP, Shipshewana, Ind. “We’re seeing a lot of resilience in the consumer, very good turn of inventory at the retail level. Yeah, I mean we’re excited about what we’re seeing and hearing out here. It’s refreshing to see.”
“I would agree with that,” says Pete Liegl, president & CEO of Forest River Inc., Elkhart, Ind., “that it’s better than the general consensus was six months ago. At this rate, we’ll definitely exceed last year’s shipments. But again, with the elections coming up, it’s a little bit of an unknown. I believe that if Obama gets reelected that the economy’s going to suffer for awhile.”
The trend is more than subtle in the RV-building hub of Elkhart County, Ind., where the unemployment rate has dropped three months in a row and has finally slipped below double digits for the first time in more than three years to 9.9% in March from a modern high of more than 20%, The Elkhart Truth reported Saturday (April 21).
Supreme Corp., a Goshen, Ind.-based commercial truck builder with allied suppliers, last week announced it was investing $7 million in an expansion that should add as many as 350 jobs in the county over the next three years.
And with RV shipment and retail numbers pointing in the right direction, Thor Industries Inc.’s CrossRoads RV division broke ground Thursday on a new 93,000 square-foot facility adjacent to its 45-acre, Topeka, Ind., campus in which it plans to build the company’s Cruiser towable line.
Towable RV builder Prime Time Manufacturing, a Wakarusa, Ind.-based Forest River subsidiary, reports its sales up 70% year to date, and RV dealerships like Chicago-based Camping World Inc. and San Diego’s LaMesa RV Center are in a hiring mode.
Keystone RV Co. President Matt Zimmerman is seeing the same trends at his Thor division, but he remains cautious in his outlook because of fuel price volatility, the elections and the question of whether the early spring simply moved existing buyers forward on the calendar.
“With the unseasonably nice weather throughout the country, you wonder if we really moved up a buyer’s timeline and slammed what we typically would get in April and May into January, February and March? And it’s too early to tell,” said Zimmerman. “The reality is that we might have. But we might experience some extra turns because of the nice weather. We just don’t know yet, and that’s probably a third dynamic I would throw at you in why we’re ‘cautiously optimistic.’”
Forest River, for its part, will be breaking ground shortly on a new 100,000-square-foot plant in a Goshen industrial park for production of its XLR toyhaulers.
“And we just closed on a 135,000-square-foot plant up on the toll road north of Middlebury,” adds Liegl. “That’s a big plant right next to our pontoon operation (Forest River Marine). We bought that from Pace American, and that’s up in the air right now as to who (which division) is going to get it. We’ve got a couple of people arguing about who wants it, whether it will be pontoon boats or towable RVs.”
Meanwhile, Doug Gaeddert, a general manager for Forest River, says he’s not experiencing higher expectations at this point because his divisions – all towable builders based in the Elkhart area – have been on a solid roll for some time.
“We’ve been confident all the way through,” says Gaeddert, first vice chairman of the Recreation Vehicle Industry Association (RVIA). “We’ve been rocking for some time and it’s just been continuing to increase. At the Open House last fall, we (Forest River) wrote close to $500 million worth of business. Some of our divisions had a hell of a Louisville (National Show in December). And I’m out of capacity right now in four plants locally.”