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Report: RV Business on the Road to Recovery
Posted By RVBusiness On July 2, 2012 @ 7:34 am In Breaking News | No Comments
The RV sector is on the road to recovery after being decimated by the recession, losing 260 dealers and three big manufacturers nationwide.
“We’re probably having the best year we’ve had in several years and we’re trying very hard,” said Bo Beaubrixey, general manager at the Camping World dealership in Valencia, Calif. “People want to use their RVs and go camping. All the campgrounds are full (this season). Even high gas prices are not stopping people from using their RVs.”
The Los Angeles Daily News reports that the store’s sales have increased between 25% and 30% from the recession low, Beaubrixey said. He declined to provide specific numbers.
After the economy tanked, people were still coming into the store looking to buy but could not get financing, he said.
Buying an RV is similar to buying a car, but banks want a 20% down payment and the payments are stretched over 10, 12, 15 or 20 years, Beaubrixey said.
This sector measures its strength in shipments of travel trailers and motorcoaches from manufacturers to dealers. It has been on the upswing since 2009, said Phil Ingrassia, president of the national Recreation Vehicle Dealers Association (RVDA).
Through the end of May, RV shipments increased 8.6%t to 127,454, compared with 117,352 in the first five months of 2011, he said.
For all of this year the industry is forecasting a 6.9% increase in shipments to 269,700. That’s an increase of 62.8% from the recession low of 165,700 in 2009.
“It’s definitely on the rebound,” Ingrassia said. “RVs are a discretionary purchase. One of the things we look at is consumer sentiment. When consumer sentiment takes a dive, usually RV shipments drop as well.”
Camping trailers dominate the market, but coach sales have been on the rise, too.
The association does a dealer census every five years and there were 3,000 nationwide in 2007. He expects the figure to be significantly lower when the 2012 figure is released, though business is starting to recover.
“Now we’re seeing some expansion and consolidation. We’re not seeing dealers close like they did in 2008 and 2009,” Ingrassia said.
Niel’s Motor Homes on Sepulveda Boulevard in North Hills has been in the RV industry since 1953, making it the oldest dealer in Los Angeles County.
Dealership general manager Jim Royal said business began perking up about a year ago, but he did not provide specific numbers.
“Sales (levels) are not what they were in ’07 and ’08. This business was doing very well, and pretty much overnight it changed,” he said.
But the dealership got a bump in its service business.
“People were keeping their motorhomes longer and keeping them up rather than trading them in on a new one,” Royal said.
Sales of used RVs are also gaining strength as the economy slowly recovers.
“I used to ask the (buyer) do you want a new one or a used one and he’d say `New, I never buy used.’ You don’t hear that anymore,” Royal said.
Eighty percent of the store’s customers are repeat buyers, he said.
One of those is Gerald Knight of Agua Dulce, who currently owns a Fleetwood 40-foot coach. It’s the third RV he’s bought at Niel’s.
Knight brought his rig in for service last week because he’s planning a trip to Big Sur over the holiday with his two sons.
His coach has a rear-mounted diesel engine with a 125-gallon tank, according to Fleetwood’s specification sheet, and a fill-up would cost $487 at Friday’s prices.
That not a deterrent to Knight, who takes about six trips in the coach each year.
Knight, a driver in the entertainment industry, likes the flexibility offered by an RV.
“If you really like a place you can stay longer. You’re not tied into a hotel. You’ve got so many options here,” he said. “The state parks with the woods or the beaches.”
The price range of motorized RVs covers a broad spectrum. Campers on pickup truck bodies start in the low five figures and bus-style coaches can reach the high five figures or more.
The coach the Clemenses bought cost about $130,000, and has flat-screen televisions, including one mounted outside the coach, a roaming satellite antenna and it can sleep seven.
Considering all the features, it was a bargain, the Clemenses said.
The Clemenses have taken the Thor Challenger to Las Vegas and Lone Pine. This is their first extended trip, and the couple likes the ride.
The coach has 10-cylinder truck engine and runs on regular gas and the fuel gauge on the 80-gallon tank was only at the halfway mark by the time they reached Kingman Ariz.
They planned to arrive in Owensboro, Ky., on Sunday after stops in Albuquerque, N.M., and Oklahoma City, Okla.
They will eventually cover about 4,000 miles on the trip that includes a stopover in Branson, Mo., and Norman, Okla., before arriving back at their home in Tehachapi.
“The trip’s been great, although I-40 is clearly in need of resurfacing,” Mark Clemens said.
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