The continued consolidation of the North American RV industry was underscored by Thursday’s (April 17) announcement that Thor Industries Inc. had reached an agreement to acquire Shipshewana, Ind.-based towable RV builder K-Z Inc. in a $53.4 million transaction set to close May 1.
News that K-Z, led by founder and CEO Daryl Zook, was being purchased by the nation’s largest RV builder came only weeks after No. 3 Jayco Inc. bought Shipshewana’s Open Range RV Co., and a few months after Thor acquired specialty trailer manufacturer Bison Coach and Livin’ Lite Recreational Vehicles LLC.
So, for those keeping score, it stacks up like this: Add Thor’s current 36.7% retail market share to that of tightly competitive No. 2 Forest River Inc.’s 33.4% as well as Jayco’s 11.8% and Winnebago Industries Inc.’s 3.1% and you’ve got 85% of U.S. RV retail sales occupied by the four largest manufacturers, reports Tom Walworth, president of Statistical Surveys Inc., Grand Rapids, Mich.
The rest is spread out among some 60 companies. And while there’s never been a similar scenario in the RV business, even in the ‘80’s and ‘90’s when Fleetwood Enterprises Inc. pretty much ruled the roost with 33% to 35% of retail sales, Thor President & CEO Bob Martin feels the current trend is a good thing – at least for Thor and the other front-line players.
“I think that it’s good for all – for lending institutions and dealers, for them to know that they’re dealing with companies that have solid backgrounds and financials,” says Martin. “We also see this (consolidation) on the dealer side, and we feel that’s healthy as well. You see some of the large dealers who have expanded into other (geographic) markets. You know, for us, we have relationships with them and it’s positive in many areas in just being familiar and having relationships and then growing with them. So, I do (generally view it as a good thing), and I see where there can be more consolidation going on in the future.”
Walworth considers the current spate of acquisitions a byproduct of a growing marketplace that still has plenty of room to grow to reach its pre-recessionary peak. “If you take a look at the market overall,’ said Walworth, “the total market at retail for 2013 was basically 246,700 units. In 2004, prior to the Hurricane Katrina era, the market did 319,000 (units) and 320,000 in 2005. So, I think that this market’s got about 74,000 units more to sell just to get back to where they were.
“Bottom line, there’s more gas in the tank,” says Walworth, who ultimately foresees growth well beyond pre-recessionary highs considering the industry’s merging demographics, including the arrival of “mass numbers” of Baby Boomers possessing “more money than any generation in history” plus Millennials who seem poised to buy into the RV universe at a robust pace.
“All things considered, I think that this market has a lot more growth potential in it, and this growth potential, I think, gives these companies the incentive to go out and buy anything that would be out there that’s available – either for market share or for capacity,” said Walworth, who hasn’t seen this same degree of consolidation in the marine, utility trailer and manufactured housing sectors. “But we still have a lot of growing in this industry just to get back to where we were.”