The market for recreational vehicles hit a ditch a few years ago as the financial crisis and recession reeled in credit and sent consumers on a mad dash away from big-ticket purchases.
Investors Business Daily reported that the industry began to grind its way out in 2010. Today, manufacturers of RVs and RV components are enjoying their strongest growth in years thanks to a combination of better economic conditions, improved lending and new products.
Leading names such as Thor Industries Inc., Winnebago Industries Inc. and Drew Industries Inc. have all seen a recent rise in sales and earnings as the RV industry continues to recover from the beating it took in 2008 and 2009.
The Recreation Vehicle Industry Association (RVIA) expects overall shipments of RVs to reach 273,600 units this year. That’s up from 252,300 units in 2011 and well above the 165,700 units that were sold during the industry bottom in 2009.
The current rebound is partly due to the natural business cycle. Once an industry hits bottom, there’s no place to go, theoretically, but up. But the RV industry also benefits from other positive trends, says RVIA spokesman Kevin Broom.
“There’s a new product mix out there that is helping drive sales,” he said. “On the motorhome side, there are an increasing number of fuel-efficient vehicles. You have better technology, more and different kinds of products, and different ways of building them.”
The industry has gotten another leg up from an expanded customer base that goes beyond the traditional RV demographic of retirees and empty nesters. Today, about one-third of RV owners have kids at home under the age of 18, Broom says.
Credit markets also have loosened up compared to a few years ago, when the financial crisis caused many banks to tighten up their lending standards for expensive items. This was an especially thorny problem in the RV business, where the average vehicle is priced around $37,000.
“The credit freeze in late 2008 and early 2009 hurt the RV industry two ways,” Broom said. “There was an inability on the part of many consumers to get loans. RV dealers had a hard time getting financing to replace their inventory.”
That issue has improved considerably over the last year or so, he says. More financing options are available to dealers, which means more product is available to consumers at the retail level.