Ed Garner sees more enthusiasm in the people who prowl his lots these days. He likes it.
“It seems like we’re getting more traffic,” said Garner, owner of Autorama RV Center in Des Moines, Iowa, where business this year is up an estimated 40% from the worst-in-a-decade decline of 2008. “A lot of people seem to be coming farther away than what they used to. We’re getting people coming from 100, 125 miles away.”
Part of that, Garner conceded, may be that his pool of customers is larger now that several former competitors have closed. But readiness to buy, he said, also provides hope that America’s bottom-dwelling recreational vehicle industry now finally seems pointed upward, according to The Des Moines Register.
“I think there’s still room for improvement,” said Garner, who over the weekend sponsored an RV and boat show in the Varied Industries Building at the Iowa State Fairgrounds. “I don’t think a lot of the retirement people that we used to get are probably the strongest buyers right now. But the farm people who are still farming, they seem to have a little more money than they’ve had.”
Ron Lichtsinn, owner of Lichtsinn Motors Inc. in Forest City, agreed that a troubled business seem to be trending up. The world is not yet as rosy for Lichtsinn, who sells motorhomes with six-digit prices in comparison to Garner, who sells mostly travel trailers.
“If you were going to compare it back to the record years of ’04 and ’05, yeah, it’s still lousy,” Lichtsinn said this week. “But we’re certainly starting to see a lot of energy.”
That’s important, analysts said, because RVs generally are a good indication of whether consumers are ready to spend money on big discretionary purchases.
“The RV industry is always the first in and the first out, and there’s already been a noticeable beginning of it coming out of the current recession,” Dave Hoefer, an adviser to Earthbound Recreational Vehicles in Indiana, told Bloomberg News earlier this month.
Data from the national Recreation Vehicle Industry Association (RVIA) show wholesale sales of RVs in the United States peaked at 390,500 in 2006, slipped to 353,400 the next year, then dove to 237,000 in 2008.
Shipments from factories to dealers are projected to total less than 150,000 in 2009, according to an association report released last week. But July’s monthly decline was the smallest it’s been since October, and analysts now project the tide to turn in 2010, with factory shipments of roughly 185,800.
Industry news reports describe a creeping optimism that in recent months has included slightly stepped-up production at RV makers around the nation and several new manufacturers arising from the assets of bankrupt firms.
Winnebago Industries Inc. of Forest City said this week that it has gradually begun to rehire portions of a work force that layoffs have halved in the past 18 months to 1,650 people at the end of May.
“There have been a few that have been called back, but nothing of significance,” Winnebago spokeswoman Sheila Davis said. “I think we are being cautious.”
Winnebago, which lost nearly 60% of its stock value between September 2006 and February 2009, has seen its stock triple in price since then, from $4.05 per share to $12.62 at Friday’s close.
Iowa dealers said most current buyers seem more interested in low- to moderate-priced travel trailers but that buyers also are interested in the tiers above entry-level products.
Denise Roberts, owner of Imperial RV Center in Ankeny, said consumer confidence seems to be building slowly. Her business has been picking up since April.
“I think in the early part of the year, it was more that nobody knew what was going on,” Roberts said. “I think it was fear. For a while there, it got a little scary.”
For the 16th consecutive year, the Recreation Vehicle Dealers Association (RVDA) will ask dealers to express their level of satisfaction with their manufacturers and/or specific brands, confidentially, through the association’s Dealer Satisfaction Index (DSI) survey.
RVDA’s Industry Relations Committee made major changes to the DSI survey in 2007 to make it more useful for dealers communicating with manufacturers. Dealers and manufacturers agree the changes put in place then are extremely helpful in pinpointing strengths and weaknesses, so the 16th Annual DSI follows the same format with minor tweaks put in place in 2008 to make it better, according to a news release.
The DSI is not a scientific study, but measures dealers’ attitudes about their manufacturers’ performance in eight key areas identified by RVDA’s Industry Relations Committee. The key areas include:
- Sales support
- Sales territory
- Vehicle design
- Vehicle reliability/quality
- Competitive price/value
- Parts support
- Dealership warranty support
- Overall dealer communications
One of the changes in 2008 involved asking dealers to pick which of the eight key areas listed above is the most important factor that helps their dealership sell RVs. They also were asked to pick the second- and third-most important factors.
Last year, dealers picked competitive price/value, vehicle reliability/quality, and vehicle design as the three most important factors in helping them sell RVs. Using 2008 as the baseline, the results of this year’s DSI will help determine whether dealer attitudes change over time as to the most important factors in helping them sell RVs.
Dealers also rate the brands they carry based upon their performance in the eight key areas listed above. The ratings are on a 1 to 5 scale with 5 equaling outstanding and 1 equaling poor. Brands rated by at least 15 dealers, and receiving scores on the eight criteria that average 4 or above, will receive the RVDA Quality Circle Award.
Because the way in which manufacturers and brands are rated has not changed since 2007, dealers and manufacturers now can see whether a particular manufacturer or brand is trending up or down, in terms of its performance in the eight key areas.
Last year, 13 towable RV brands built by four manufacturers and four motorhome brands built by three manufacturers received Quality Circle Awards. Four hundred sixty-eight dealers responded to the DSI survey in 2008, for 2,547 brand ratings, an average of almost 5 1/2 per dealer.
Forest River Inc. expects more than 1,600 people from about 600 RV dealerships to attend the company’s second annual dealer show Sept. 23-24 at its Elkhart, Ind., headquarters.
Some 300 towable and motorized RVs will be on display, according to Forest River General Manager Jeff Babcock. ”This is by far a bigger show than last year,” Babcock said. ”We are going to have 150 more units here than we did last year.”
Forest River’s new division, Prime Time Manufacturing (initially called Lifetime RV) will show a 32-foot double-slide prototype of its new laminated fiberglass-and-aluminum LaCrosse travel trailer and fifth-wheel series that will retail from about $22,000.
”We will be starting to ship the first part of October,” said Prime Time President Jeff Rank, who founded the division with Vice President Chris Hermon.
On the motorized side, Forest River will introduce an entry-level, gas-powered Georgetown motorhome retailing in the high-$70,000s — somewhat less than previous versions.
”We are going to be going after the lower-end gas market,” Babcock said. ”The motorhome market is starting to come back and I think we’ve purged most of the inventory that was out there. There’s no question that we are going to be a power in the motorhome business. We are going to go after it aggressively.”
Additionally, new floorplans will be introduced in Forest River’s retro-look R-Pod travel trailer while the company’s Coachmen division will show redesigned Chapparal, Brookstone and North Ridge fifth-wheels in the first collective showing of Coachmen’s lineup since Forest River purchased Coachmen Industries Inc.’s RV division last December.
As Forest River did last year, the Berkshire Hathaway Inc. subsidiary will cover food and lodging costs for visiting dealers.
”We’ve had an unbelievable response from dealers,” Babcock said. ”Last year was small potatoes compared to what’s going to be going on this year.”
The budget crunch in California’s Santa Barbara County has forced government officials to prioritize, placing public safety at the top of the pile and cutting funding to departments considered less than essential.
But the county parks department is taking up the funding challenge by turning to creative methods and staying current with fee increases in order to maintain park operations, according to the Santa Maria Times.
Most recently, the county department signed a contract with Vacation Trailers 2 U, a local enterprise that delivers recreational vehicles to campers at Cachuma Lake, which straddles Highway 154 just northwest of Santa Barbara.
The partnership is estimated to generate $25,000 annually for the county, said Dan Hernandez, department director.
The RV rental business was started by Jason and Rendy Kimbrell in July, but already customers looking to camp in comfort and convenience are enjoying the service, Jason Kimbrell said.
Nightly prices for the three different sized RVs run from $150 to $225, and the county receives 10% of the sales.
Vacation Trailers 2 U offers pick-up and drop-off of the 2010 RV models at Cachuma Lake, and the accommodations include generators, slide-out rooms, kitchens fully stocked with pots, pans, dishes, utensils, barbecue tools and camping chairs.
Depending on the size of the rental unit, four to six people can fit comfortably, and dogs are welcome.
The rental firm also has established camping relationships at six other area sites: Carpinteria Beach, El Capitan Beach, Refugio Beach, Gaviota Beach, Ocean Mesa and Flying Flags.
A company that will turn out electric vehicles from a Moreno Valley, Calif., factory could ultimately employ as many as 2,000 people if the firm’s products prove as popular as its executives hope.
For now, the venture with South Korean-based CT&T United will hire about 120 workers. The battery-powered vehicles, which are not legal for freeways and can’t go as fast as the speed limits on most major surface streets, will roll off the assembly line by the first part of next year.
CT&T signed a deal Thursday (Sept. 10) to make the electric cars with Moreno Valley-based recreational vehicle company MVP RV. One of two factories MVP owns near March Air Reserve Base will be converted to make electric vehicles by a new company called MVP-EV, according to the Riverside Press-Enterprise.
MVP will continue to manufacture recreational vehicles in the second factory, said Pablo Carmona, vice president of manufacturing for MVP-EV.
The first electric cars are expected to roll out of the new factory in January following several months of refurbishing, Carmona said. It will be the Korean carmaker’s only manufacturing center on the West Coast, as well as its regional sales and service hub.
If the demand is strong enough, the plant could turn out 10,000 vehicles a year by 2011, he said.
Carmona, who started out at this factory on the assembly line in 1996 when it made RVs for Thor of California and worked his way to a management position, said MVP officials expect to start looking for workers in about a month. Some could be people who formerly built RVs at one of several Inland companies that have closed, such as Fleetwood Enterprises Inc., National RV Holdings Inc. and Weekend Warrior Inc., he said.
“People that used to make RVs would be comfortable making these cars,” Carmona said.
CT&T has been making electric vehicles in South Korea and China since it was founded in 2002. The company announced plans to open operations in the United States about two months ago.
Two models, the c-Zone, which resembles a golf cart with a fifth seat in the rear, and the e-Zone, which is reminiscent of the French-built Smart Car, were on display for the signing ceremony at the Riverside Convention Center. It was part of an event called the Riverside County Day of Transformation, which brought leaders together to discuss ways to generate jobs and revitalize the economy.
One of those strategies involves jobs based on renewable energy concepts, and in that regard MVP-EV fits. While it currently costs as much as $60 to fill the tank of a sport utility vehicle, maintenance costs for these models run between $5 and $10 a month.
The vehicles are priced between $7,000 and $17,000, and CT&T has more models on the drawing board, including a battery-powered bus, said Brad Williams, CEO of MVP-EV.
But the top speed for the models displayed Thursday is only about 35 mph. People with errands in their neighborhoods and senior citizens are among the likely marketing targets, and the company calls the cars “neighborhood electrical vehicles.”
The cost and the size of the models are drawbacks for consumers, said Mike Caudill, who writes for NADAGuides.com, a publication of the National Automobile Dealers Association.
“I don’t think the demand is going to be as high as this company hopes it will be,” he said of MVP-EV.
“People don’t have that discretionary income to buy a vehicle to take down to the grocery store,” Caudill said
Caudill also is president of Driven Communications in Temecula which represents an electric motorcycle manufacturer and a Singapore firm that is developing a system to convert standard cars into electric ones. He said price will ultimately determine the popularity of a car that may not exceed speeds of 35 mph.
David Stewart, dean of A. Gary Anderson Graduate School of Management at the University of California’s Riverside campus, said there’s risk with every startup, but MVP-EV will be marketed all over the West and has minimal competition.
“It won’t replace the internal combustion automobile, but for someone who is retired or for a stay-at-home spouse it could be a good alternative,” Stewart said. “Also, we’re at a stage where we’re receptive to alternative-energy cars.”
The cars could also be popular with government agencies, including police departments and code enforcement personnel, Williams said.
Tom Freeman, spokesman for the Riverside County Economic Development Agency, said a delegation from CT&T, including its founder, Young Gi Lee, visited Gov. Arnold Schwarzenegger in March seeking sites for its factory. State, county and city officials helped the company zero in on Moreno Valley.
“This is one of those leads that happened in quick-time,” Freeman said. “In economic development, that doesn’t happen very often.”
Riverside County’s unemployment rate of 14.7% in July is one of the highest of any urbanized counties in the state, and areas such as Moreno Valley and Perris, hit hard by foreclosures, have struggled more than most. That is why the news pleased officials from Moreno Valley. Bonnie Flickinger, mayor pro-tem, vowed to purchase the first vehicle that comes off the MVP-EV line.
Newcoast Financial Services, a leading finance firm specializing in the recreational vehicle industry, announced Friday (Aug. 28) the launch of a new website: www.Newcoast.com. The website has been designed from the framework out to educate RV customers on how Newcoast Financial can provide specialized financing programs to meet their unique needs, according to a news release.
Headquartered in Clearwater, Fla.,, Newcoast Financial Services has been offering retail financial services in the boat, yacht, recreational vehicle and aircraft industries since 2001. Newcoast Financial currently has 12 financial representatives serving all 50 states. Other services include extended warranty protection plans for RVs.
“Whether they are purchasing a travel trailer or Class A motorhome or refinancing their current loan, we make sure our customers are offered the most competitive rates plus all the options they deserve in their financial packages,” said James Kelaita, president of Newcoast Financial Services. “What separates us from the competition, besides our low rates and personalized service, is the industry knowledge and experience that we provide. Our team specializes in RV and motorhome loans.”
Newcoast Financial’s RV industry experience means that customers can expect a simple application process, quick approvals and no-hassle closings, he said. In addition, competitive rates and long-term financing (up to 20 years) mean that owning an RV has never been more affordable. Visitors to the firm’s new website will be able to learn about available services, find a local contact, ask questions, submit a loan application and more.
Services include new RV loans, used RV financing and refinancing of existing loans. Newcoast Financial will also help customers choose an extended warranty plan to protect their investment.
“We look forward to helping put people in the recreational vehicle of their dreams, so that they can enjoy the lifestyle they deserve,² said Kelaita. “Our philosophy is well represented by this new website, and we encourage anyone who would like more information on Newcoast Financial and its services to visit us online and contact us with queries.”
This summer, both the Republican and Democratic candidates in the hotly contested race for governor of Virginia embarked on RV tours of the state, employing motorhomes to reach as many towns — and voters — as possible before the election in November, according to RVIA Today Express.
Democratic candidate Creigh Deeds kicked off his month-long “Deeds Country” tour of Virginia’s rural regions in early August, saying “I need to get as many votes as I can from the rural parts of the state.” Deeds and his staff are traveling to Virginia’s rural communities in a Class A motorhome affixed with “Deeds Country” campaign signs.
Shortly after Deeds’ RV tour began, Republican gubernatorial candidate Bob McDonnell embarked on his own month-long tour of the state, traveling in a Class A motorhome customized with McDonnell’s “New Jobs, New Opportunities” campaign materials. The McDonnell campaign has also adopted the song “Me and My RV” by professor Marty Music (www.meandmyrv.com) as the theme song for their RV tour.
The RV tours are garnering significant media attention for the candidates, who both noted that the RVs attract the interest of families who spot them on the road.
Recreation Vehicle Industry Association (RVIA) President Richard Coon said, “It’s great to see that, increasingly, political candidates of all persuasions are learning what America’s 30 million RVers have known all along: that traveling in an RV is the best way to see America.”
A high school graduate who learned everything he knows about motorhomes from “the university of Winnebago” has navigated one of the industry’s leading manufacturers over very bumpy terrain in the past year, according to the Associated Press.
Robert Olson, 58, took a job installing motorhome windows at Winnebago Industries Inc. at age 18 in hopes of saving money for college. He never left, foregoing a college education for on-the-job training that led him to where he is now, 40 years later, sitting in the CEO seat.
Actually, the seat he chose for a recent interview was a tan plush leather sectional sofa in the company’s newly unveiled $300,000 Itasca Ellipse.
The 42-foot home on wheels — the company’s largest motorhome ever – was parked outside Winnebago corporate headquarters in Forest City, Iowa, a small farming community of 4,500 people near the Iowa/Minnesota state line.
Production takes place in a campus of several factory buildings encompassing 2.5 million square feet. Components aren’t just assembled here, but seat covers, dashboards, water tanks and cabinets — more than half of the motorhome parts — are manufactured here.
Olson proudly discusses the Ellipse’s amenities: ceramic floor tile, granite countertops and cherry wood cabinetry. There’s a gas fireplace in the living room beneath a large flat-screen television. A second TV faces the king-sized bed in the back of the RV, which you reach after passing a bathroom, and a washer and dryer enclosed in a hallway closet.
“This is what our customers who like to go camping are asking for,” Olson said with a smile.
Going camping these days, it seems, isn’t what it used to be.
Q: It’s been a torturous couple of years for your industry, a 55% decline in shipments in the past year alone. Tight credit, high fuel prices and job losses hit you and your competitors hard. What has it been like?
A: I think you’re going to be hard-pressed to look at any recession this industry has had where you’ve had 10 manufacturers go out of business. They’ve physically shut their doors, sold their assets and they’re done. You’ve also got four other manufacturers who have filed for bankruptcy protection. Some of those are really big names in this industry.
Q: You’ve had to cut total number of workers by nearly 50% to around 1,700, close factories, make other cuts. Is that what enabled you to get through it?
A: We learned a long time ago that you always carry a war chest of cash in reserve and we did that again. We’re still at a point, even being in this recession for about 24 months, where we have no debt. We think that’s a very important part of our success.
Q: If the economy is beginning to recover, are you able to capture some of the customers who might have bought from former competitors?
A: We think we are. Those 10 manufacturers made up only 4-5% of the market, so there’s not a lot there you’ll gain. Some of those in bankruptcy — Monaco Coach Corp. and Fleetwood Enterprises Inc. — made up nearly a third of the market. One of the things that’s a little disheartening to us is that you can file for bankruptcy and get a clean slate. You get to start over. So, now we’ve got two competitors we thought were about down and out who get to come back, and will probably be stronger than ever.
Right now we’re just about 19% of the market and we’ve picked up some.
Q: Describe your average buyer?
You can’t lose sight of the fact that projections are that until 2030 you’re going to have 350,000 Baby Boomers per month joining our potential customer base.
You also have people living longer. We’ve got customers out there like at last year’s annual rally of Winnebago motorhome owners, a guy was 87 years old and he was dickering on a coach.
Q: Any other factors that might have an impact on sales?
A: What I’m really excited about is that 2004 was one of the biggest years this industry has seen in volume. Our average trade-in cycle is four to six years. So we’re right in the heart of those people wanting to trade their used coaches off for something new.
The whole market is starting to grow. Three years ago we had an African American RV club camped here and the Hispanic demographic is starting to grow.
One thing about it is, you’ve got my generation and even my kids’ generation, their parents took them camping, they took them to the lake and they sat around a campfire. A lot of people now look to gain a simpler life. They’re looking at wanting to share those types of memories with their kids.
Q: Tell me about your background. Where did you grow up?
A: I grew up in Osage. I was born and raised there. I went to school there, graduated from Osage High School. I’m very proud of my Iowa roots. My wife and I raised two children in Forest City, my daughter is 37 and my son is 34. As for my parents, my dad was a mechanic and worked at a Chevrolet garage in Osage when he was younger. He became a gas transport truck driver for a local oil company. My mom was a nurse’s aide and a cook at Osage Community Hospital.
Q: How did your career path an Winnebago Industries lead you to the CEO’s office?
My education was at the university of Winnebago. I’ve taken a lot of extra courses targeted toward the individual field I was in at the time. I’m a certified practitioner in production inventory control, for example. I got my break in the materials side of the business. It allowed me not only to see the material side but to interact with much of the manufacturing side. I then got the opportunity to move into manufacturing. I ran both the fabrications support areas and the assembly side of it, so I’ve seen all sides of the business and now I’m getting an education in sales, engineering and planning.
It’s gone extremely well.
Q: Do you have a motorhome?
A: Not yet. I will say I’m in the process of building a shed right now and it was built around having a motorhome. That is the plan, when I do retire. You can’t be in this industry and tout the beliefs of it and the memory-making part of it and not do it when you’re done. Both my wife and I are looking forward to the day we get to do that.
Recreation Vehicle Industry Association (RVIA) members elected two incumbents and four new members to the board of directors in the association’s annual elections, which concluded on Monday (Aug. 24), according to RVIA Today Express.
Andrew Baer, vice president of sales and marketing at KZRV LP; John Draheim, president of Fleetwood RV Inc., and Tim Tiffin, general manager of Tiffin Motor Homes Inc. were all newly elected to three-year terms as manufacturer representatives. Jeff Hanemaayer, chairman of Roadtrek Motorhomes, was re-elected to a three-year term manufacturer seat.
Jeff Rutherford, president of Carefree of Colorado, was newly elected for a three-year term as an at-large representative. Incumbent Garry Enyart, director of RV business for Cummins Power Generation, was re-elected to three-year term at-large seat.
Supplier Seat Election to End Sept. 5
The special election for the three-year term supplier seat continues through Sept. 5. The candidates running in the special election are John Juliano of Al-Ko Kober Corp. and Kevin Phillips of Thetford Corp. The official representatives of all RVIA eligible companies were sent instructions regarding voting in this special election.
Each of the newly elected board members will begin serving on Oct.1. The RVIA board has the highest level of authority in the association organizational structure. It is responsible for association matters on a broad policy basis.
The American Automobile Association (AAA) projects that 39.1 million travelers will take a trip of 50 miles or more away from home over the Sept. 5-7 Labor Day weekend. The numbers represent a decrease of 13.3% from Labor Day 2008, when travel was the highest this decade, at 45.1 million travelers.
The nonprofit AAA’s forecasting partner, IHS Global Insight, believes much of the decline in travel plans can be attributed to Labor Day falling late on the calendar. Labor Day this year is Sept. 7, when the school year is already two to three weeks into the fall session for most school kids, according to the South Florida Business Journal.
Last year, Labor Day fell on Sept. 1, allowing for a long weekend trip before a new school year started in most regions of the country.
In any case, analysts say upcoming holiday travel will be the third strongest for the Labor Day weekend this decade. The second busiest year was 2003, at 41.6 million travelers.
AAA expects the nationwide average price of gasoline to be approximately $2.60 per gallon – one dollar per gallon less than it was in 2008.
“Our forecast shows Labor Day travel will be up over this summer’s 4th of July holiday and that’s a positive sign,” AAA President and CEO Robert L. Darbelnet said.
Other Labor Day travel observations by AAA and IHS Global Insight:
- A greater share, 84%, of travelers will travel by auto.
- Four percent are expected to travel by air.
- Auto vacations will be taken by 32.9 million.
- Air trips will be taken by 1.5 million – the lowest number this decade.
- Traveling by other modes – which can include trains, cruises, buses, RVs, personal watercraft, motorcycles or trips that use multiple modes of travel – are expected to reach 4.8 million.
- The average amount spent is projected to be $968 and the average distance traveled will be 645 miles roundtrip.