FMCA: Price, Trust, Credit Big Factors Today

March 26, 2010 by · 3 Comments 

FMCA logoStrolling through the Family Motor Coach Association’s (FMCA) 83rd International Convention, “Albuquerque Fiesta,” which concluded Thursday (March 25) at the Expo New Mexico fairgrounds in Albuquerque, N.M., several things were self evident for those who closely follow the North American RV business:

A Newell Coach

The redesigned Newell Coach unveiled at Albuquerque.

  1. Price counts more than ever in this business, just as it does in an array of other vital and discretionary product sectors.
  2. The relational aspects of the recreational vehicle business, the dynamics of long-term business relationships, are as important – if not more so — than ever.
  3. Credit availability is still problematic, especially for higher priced products like motorhomes over $100,000.

That’s the message from an array of companies exhibiting their latest offerings at Albuquerque, one of two national rallies that Cincinatti-based FMCA is hosting this year for its members. The next one is Aug. 11-14 in Redmond, Ore.

Last week’s FMCA convention drew 1,781 family coaches, according to sources close to the Albuquerque rally. That’s a number that might have prompted disparaging remarks prior to the recession, but is more than likely viewed as a decent showing in the aftermath of a downturn that saw motorhome shipments dive a daunting 53.4% in 2009. FMCA spokesmen were unavailable for comment.

On the other hand, most agree, the market is seeing an impressive reversal that started in the last third of last year, and it is in that context that the March 22-25 convention was held.


Fleetwood RV logoDecatur, Ind.-based Fleetwood RV Inc. is experiencing a strong upswing in demand for its Class C’s and entry-level Class A’s, Mark Inkrote, national sales manager for those two product categories, told in Albuquerque.

In fact, Fleetwood, which introduced an entry-level Encounter Class A at last winter’s Louisville Show, has hiked its production rates to keep pace with the demand for its motorhomes, which, according to Inkrote, ranked first in national Class C retail sales for January. “We haven’t been in that position in a long time, and we expect the same success to continue through February and March,” said Inkrote, whose new Indiana-based company is a successor to California-based Fleetwood Enterprises Inc., which filed Chapter 11 last year.

What qualifies as a low-priced motorhome in this post-recessionary era for Fleetwood, which builds Tioga, Jamboree, Sport and Ranger-brand C-bodies, are Class C’s retailing for around $75,000 to $80,000 and Class A’s that sell for not much more than that. “We are seeing an MSRP on our Encounter of under $100,000 – a transaction price average of $80,000 to $85,000, which is where that customer is coming in and looking for a used product right now,” said Inkrote. “We’re saying ‘Look at the used, but you can also buy a new one for the same price.’”

By the same token, Justin Humphreys, national sales manager for Fleetwood’s American Coach line, sees some growth beyond the low end. “We are seeing an improvement on what we would consider the lower side of the high end market,” he said. “Our Revolution actually doubled sales versus February last year and that’s a good-apples-to-apples comparison because we weren’t in the reorganization period yet. We are seeing a lot of people who had some 45-foot, big heavy diesels trade down into the Revolution, and it offers a great value as well.”


Newmar logoHaving been out on the road extensively visiting dealers, Newmar Corp.’s senior management is focused on maintaining long-term relationships on the assumption that those are the key ingredients for future stability and growth.

“This is a continuation of something that we started last September,” said John Sammut, vice president of sales and marketing for the Nappanee, Ind., company. “We decided we were going to get out in front of our dealers during the tail end of what has been a very terrible time in our industry, as well as look for prospective dealers in markets where we’re currently unrepresented.

“We’re just re-emphasizing the fact that Newmar did what it had to do during this last 18-month period,” he added. “We made some tough decisions, but they were solid decisions. The company is still strong and well capitalized and we’re running five days a week production. We’ve been fortunate enough to be doing that since September. A large part of that is due to the face time we’ve spent with our dealers and acquiring new dealers for our products in markets that were vacated by some attrition that has happened in the dealer network over the last year to 18 months.”


Looking back at those conversations with dealers, Sammut adds, one of the most consistent messages is that the credit crisis continues, despite the market’s tentative resurgence. “The biggest problem dealers have got is with the banks,” Sammut told “Hopefully, sometime in the future, the banks will loosen up. We still hear all kinds of horror stories about customers that come in, have great credit scores, but they don’t get financed.

“That’s probably the biggest concern the dealers have,” he noted. “But that hasn’t kept us from signing up new dealers. And we’re setting them up with more of our entry-level product, but even our high-end is starting to come along, too.”

Newmar Chairman and CEO Dick Parks agreed that the credit situation has not eased to the extent that anyone would like. “That’s absolutely true,” said Parks. “We would be selling a lot more higher end product if credit was a little bit more relaxed. The banks were too loose at one point, and then came the big downturn, and now they are too tight. We’d like to see them get into the middle someplace.

“I don’t think the banks understand our business,” he noted. “They want zero liability. Basically, that’s how they are running their businesses now. They want zero risk – retail and wholesale – and they are trying to tell dealers how to run their business, strictly based on the fact that they don’t want any risk.”

On the other hand, Newmar President Matt Miller points out that the recession is perceptibly lifting. “No question,” said Miller, son of Newmar founder Mahlon Miller. “We’ve definitely come through the worst of it. The market is not as strong as we’d like to see it. But like Dick was saying, the main problem is the banking situation. If the pendulum were somewhat closer to the middle, our business would be much stronger.”

“The biggest thing that has changed from a year ago that we’ve seen in 2010,” adds Sammut, “is that consumer confidence has improved and their willingness to get serious and talk about the purchase of a recreational vehicle product has greatly improved from a year ago. Again, the single limiting factor about how quickly or how gradually our industry recovers is in the hands of the financial institutions.”

Entegra Coach ColorJim Jacobs, recently named general manager of the Jayco Inc.’s Entegra Coach and Starcraft operations after serving as vice president of sales and marketing for the Middlebury, Ind.-based firm, says he’s been seeing “fantastic” retail show attendance, even if those attendance figures don’t always equate with sales totals. Having said that, Jacobs noted, the Middlebury, Ind.-based manufacturers is doing well.

On the towable side of the business, less expensive products are performing best – including lightweights – while higher-end fifth-wheels are still a bit soft. “It’s not where we want it to be,” said Jacobs. “But, overall, we’re pretty pleased about where we are in the markets.

“On the motorized side,” he continued, “we’re doing pretty well. In fact, we’re pleasantly surprised. We just announced we’re putting a significant addition onto our Class A plant and it’s going to boost our production capabilities well beyond where we are today. And we need that. Quite frankly, we’ve got a backlog on the Entegra Coach side that is much bigger than we are comfortable with.”

Although Jayco is fairly new at the Class A game, Jacobs pointed out, things are going well with it in the early stages – a time during which Jayco has signed some high volume and reputable dealers. “We think that (Entegra) is going to be a significant growth opportunity for Jayco,” said Jacobs, adding that the key to navigating today’s “tough” motorized market is “trust” as the recession lifts.

Toward that end, Jacobs maintained, it seems as if the history, strength and reputation of Jayco are boosting the company’s new Entegra Coach division.

“And we’re seeing the same carryover onto the retail side of it,” maintained Jacobs, whose company had a brief foray into the Class A business seven years ago. “People are extremely familiar with Jayco, and when they walk in our Entegra Coach product, they are very accepting of the fact that this is a good long-term company that bought out the assets of Travel Supreme, and Travel Supreme had a pretty good reputation in the industry as well. It’s been a good marriage for us.”

Convincing wholesale and retail customers that Jayco is in the Class A market for the long haul is the key, said Jacobs. “What we’ve done with our Entegra Coach, the commitment we made to brick and mortar by adding on to our manufacturing facilities, I think people are really starting to come around to the idea that we are serious about the Class A market and won’t relive 2003 all over again and we will be a long-term player in the Class A market.”

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Motor Home Specialist Adds Entegra Coach Line

March 18, 2010 by · Leave a Comment 

Entegra Coach Color ReversedMotor Home Specialist in Alvarado, Texas, has joined the Entegra Coach network of dealerships, according to a news release from parent company Jayco Inc.

In making the announcement, Jim Jacobs, general manager of Entegra Coach, said that Motor Home Specialist has been authorized to sell all three Entegra Coach diesel-powered Class A motorhome lines: Aspire, Anthem and Cornerstone.

“We are proud to welcome Motor Home Specialist to the Entegra Coach team,” Jacobs said. “They have been the No. 1 selling motorhome dealer in the state of Texas for three consecutive years and they will be a great asset not only to Entegra Coach, but also to our growing network throughout the U.S. and Canada.”

Motor Home Specialist was founded in 1998 and is one of the most successful family-owned and family-operated RV dealers in the country. In 2009, Motor Home Specialist was the No. 2 volume selling diesel Class A motorhome dealer in the United States.

“The Entegra Coach commitment to customers and dealers, as well as their dedication to building quality products helped lead us to our decision,” said Donny O’Banion, Motor Home Specialis CEOt. “They are a division of Jayco Inc., one of the most respected names in the RV business and we know they have the strength and integrity to stand behind their products. Their knowledge and ability to satisfy customer needs is exactly the kind of business partnership that we look for.”

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Jayco’s Expansion: Another Sign of RV Upturn

March 9, 2010 by · Leave a Comment 

Th Aspire Class A by Entegra Motorhomes

The Aspire Class A by Entegra Coach

As one of a number of recreational vehicle manufacturers recovering from the recession of 2008-2009, Jayco Inc. will start building high-end Entegra Class A motorhomes in June in a 30,000-square-foot addition to its factory in Middlebury, Ind.

”The expansion has started,” Jayco President and COO Derald Bontrager told RVBusiness. ”We have moved dirt. We anticipate that the building will increase our production from 150 a year to right around a thousand.”

The city of Middlebury in February approved a 10-year tax abatement on the property and a three-year abatement on manufacturing and IT equipment that will be going into the new facility.

In a related move, Jayco in May will restart limited production of its Starcraft towable RV brand in the same Topeka, Ind., factory that it mothballed last year as the company moved Starcraft production to Middlebury during the recession. Full production of Starcraft units is expected to shift back to Topeka over the next two to three years as some models continue for now to be built in Middlebury.

Initially, Jayco will move 65 people to Topeka to build Starcraft’s Autumn Ridge and Travel Star towables.

”At the time (of Starcraft’s 2009 move to Middlebury) we said that when market conditions allowed us we would reopen in Topeka,” Bontrager said. ”We feel the time is now to take advantage of the market that is starting to return. We don’t have a timetable yet, but we will be moving all our Starcraft product lines over to Topeka.”

Jim Jacobs recently was named general manager of both the Starcraft RV and Entegra Coach divisions.

Derald Bontrager, Jayco president

Derald Bontrager, Jayco president

Bontrager said that both moves are in response to improvement of the RV market as the U.S. emerges from the longest economic recession in more than 50 years.

”During the winter months, part of what’s been going on, along with the increased retail activity, is that dealers have been restocking for the upcoming spring selling season,” Bontrager said. ”Retail shows all over the country have been very well attended and sales have been relatively good — better than last year. People are doing more than looking. They are out buying.”

In 2008, Jayco acquired the assets of former Wakarusa, Ind.-based Travel Supreme Corp. and created the Entegra line of Class A diesel pushers in lengths up to 45 feet with MSRPs from $250,000 to $600,000.

The recession that followed stifled Jayco’s plans for the Entegra. ”We are still pretty much a startup in the luxury diesel market,” Bontrager said.

Bontrager said the expansion of the Entegra production line is necessary. ”With our current production capacity of 150 a year, our backlogs have grown to an unacceptable level,” he said. ”We anticipate that there will be a two-year ramp up to get to the production level we want to hit as we build our dealer base and add to our (Entegra) product offering.”

Bontrager reported the company has rehired 250 people that had been laid off and that Jayco’s total employment is now at about 1,500 workers. ”Our production today is double what it was a year ago,” he said.

But while economic prospects appear to be improving, Bontrager said that the RV industry still has a way to go before full recovery.

”There are still a lot of segments of our industry and of the economy that have to come back before we are on really solid footing. It’s going to be a different type of recovery; it’s going to be a slow recovery.”

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