Cozy campers, morphing motorcycles and billowing boats are the types of vehicles that individuals, couples and families take out for fun and trips.
Unfortunately for those industries, far fewer people bought those products in 2009 than in previous years. Prime culprit: the lagging economy, according to the Charleston Post and Courier.
“It’s just everything hit us at one time,” said Gloria Morgan, owner of The Trail Center in North Charleston, S.C. “We are hoping for a recovery.”
This year is apt to be an improvement, national and Charleston area observers contend. Local retailers said people are wandering into showrooms and are shopping, if not in cruises, zooms and waves, at least in lurches, fits and trickles.
A few days with temperatures in the 80s hasn’t hurt locally.
“Naturally, the weather is warmer,” said Morgan, noting that customers are most intrigued with the center’s pop up campers from its main brand, Jayco. “The winter had been bad. They just want to get out and see.”
National figures paint a grim result for 2009 but a brightening outlook for this year. Consider:
- Recreational vehicle shipments are projected to total 215,900 this year, up 30% from 2009, according to the Recreation Vehicle Industry Association (RVIA). Dealers are restocking inventory as sales continue to pick up.
- RV shipments barely topped 165,000 last year, off 30.1% from 2008. “Lower shipments in 2009 were caused by the longest and deepest U.S. recession since the 1930s, the tightest credit conditions in several decades, job losses, falling household wealth, slower growth in real incomes and historically low consumer confidence,” said Richard Curtin, RV industry analyst and director of consumer surveys at the University of Michigan.
- Motorcycle sales dropped 40.8% in 2009 from the year before, with 520,502 dual sport, off-road, street bike and scooters sold compared with 879,910 the year before, based on figures compiled by webBikeWorld.com. Street bikes make up the lion’s share of the market with more than 60% of all sales. The shallowest decline was in off-road cycles, which dropped 28.4% year to year.
- There are pockets of growth in the cycle business this year: BMW Motorrad USA saw sales jump 52% in February from the year before.
Lowcountry revved up
The tough economy hasn’t stopped Charleston area motorsports dealers from expanding their operations. Velocity Powersports unveiled an expansive new retail center at Interstate 26 and College Park Road last year. American Biker of Charleston moved from cramped quarters to a roomy new building on Treeland Drive in Ladson.
On the boating scene, Sea Ray of Charleston found a home at the massive Sportsman’s Island center off I-526 at Clements Ferry Road selling Scout and Boston Whaler watercraft. Duncan’s Boats is moving back to its original spot on the Ashley River.
One edge for the recreational side of the motor vehicle business is the variety: people can choose from RVs, campers, jet skis, power boats, fishing vessels, motorcycles, trikes and scooters.
Charleston Powersports, which is in the process of moving into a much larger building, is seeing signs of sales improvement. It offers Suzuki, Yamaha and Kawasaki motorcycles, two types of scooters, all-terrain and utility-terrain vehicles, jet skis and jet boats.
“We carry something for everybody,” says Kyle Carter, sales manager.
Wholesale RV shipments are expected to total 215,900 units in 2010, according to Richard Curtin’s latest projection in the Spring 2010 issue of RV Roadsigns, quarterly forecast of RV deliveries to RV retailers published by the Recreation Vehicle Industry Association (RVIA).
The gain to 215,900 units would be a 30% rise over the 2009 year end total of 165,700 units. It is also a gain of 6% over Curtin’s most recent forecast delivered in winter, 2009. In December, Curtin projected 2010 shipments to reach 203,500 units. That was a step up from Curtin’s previous 2010 prognostication of 185,800 units and, before that, 169,500 units, the last of which was issued last June.
Curtin attributes the rising shipment totals seen in late 2009 and early 2010 to the restocking of dealer inventories as well as an improving trend in RV sales to consumers.
“There will be some economic conditions, such as lagging job and income growth and lingering credit constraints, that could slow the pace of progress,” said Curtin. “But, the industry is firmly on the road to recovery with the expected gains in RV shipments next year to be shared by travel trailers as well as motorhomes.”
RV Roadsigns is published quarterly and available to RVIA members at a password-protected link. Those who aren’t RVIA members can subscribe to the newsletter in the RVIA Store at www.rvia.org.
Editor’s Note: The investment firm Robert W. Baird & Co. hosted an investor field trip to the National RV Trade Show in Louisville, Ky., this week. Here are excerpts from the company’s report contained in a current client newsletter:
Low dealer inventory and strong OEM backlogs have insiders optimistic, supporting our robust (wholesale) recovery scenario. We remain bullish on wholesale fundamentals, but prefer a margin of safety until the magnitude of the retail recovery becomes clearer.
Light attendance. Attendance was light, by our estimation. Our sources indicate attendance was flat after falling 40% in 2008 as dealers conserve resources. Investor interest was up.
Don’t worry. Be happy. We sensed relief and contrived optimism at the show. The “bottom” we and others identified earlier this year – which is evident in low dealer inventories and robust OEM backlogs – has nearly everyone focused on a better 2010. We continue to believe the return to a “normal” inventory replenishment rate will drive a robust recovery in 2010 – but retail demand must recover if the recovery is to be sustainable.
The bank is boss. More than ever, bank decisions about consumer credit and wholesale lending control the fate of the RV industry. By enforcing more disciplined inventory management and demanding that consumers/dealers have more “skin in the game,” banks will influence industry growth and determine the winners and losers. Having been caught holding distressed collateral from weaker OEMs, banks want better partners. In an industry with few barriers to entry – access to capital provides an opportunity for well-managed businesses. Among the winners, one banker listed Thor Industries Inc., Forest River Inc., Tiffin Motor Homes Inc., Jayco Inc., Winnebago Industries Inc. and Heartland Recreational Vehicles LLC.
Conservative RVIA forecast. Richard Curtin revised his 2010 shipment forecast – but remains overly conservative in our view, especially in motorhomes. He sees 2010 towable shipments up 30% (up from 29%) and motorhome shipments up 25% (down from 27%). For perspective, we expect motorhome shipments to be up 108% at Winnebago.
Outlook. We remain bullish on fundamentals as a robust wholesale recovery unfolds, but prefer a better margin of safety.
Recreation Vehicle Industry Association (RVIA) President Richard Coon said today (Dec. 1) that the RV industry is primed and ready for recovery, emphasizing the continued popularity of RVing among customers and potential buyers and the recent uptick in wholesale RV shipments as evidence that the worst of times may be over for the RV industry.
Coon delivered this industry forecast at the “Outlook 2010: Let the Sun Shine” market expansion showcase, kicking off the 47th Annual National RV Trade Show in Louisville, Ky.
“We have survived the Great Depression…numerous recessions and market downturns…fuel crises…acts of terrorism and wars. But we have endured,” Coon said. “Why? Because RVs are woven into the fabric of America. Americans love RVing, they love our products and how they enrich their lives, allowing them to spend time in the great outdoors with loved ones.”
According to a news release, Coon pointed to a strengthening stock market, slowing job loss, higher productivity, increasing home sales, and rising manufacturing hours as reasons for economic optimism; while noting that weak consumer confidence, continued high unemployment and anemic consumer spending still present challenges.
But the most telling sign that the RV industry is on the road to recovery can be found in wholesale shipment numbers, which have been trending upward for several months. Coon reported that, in October, total units were 16,600, an increase of 23% over October 2008 shipments. Seasonally adjusted, October shipments hit an annual rate of more than 216,000 units, marking the third consecutive month that annualized shipments topped 200,000 units.
Based on these positive developments, Coon reported that University of Michigan economist Richard Curtin now forecasts wholesale shipments to finish this year at 159,500 units.
Looking ahead to 2010, Curtin sees RV shipments climbing by 27% to 203,500 units, with increases spread across all vehicle types:
- Travel trailer shipments are expected to climb 31% to 130,400 units
- Fifth-wheels are expected to jump 25% to 42,800 units
- Folding camping trailers will increase by 11% to 13,900 units
- Truck campers will see an 11% rise to 2,000 units.
Motorized segments are also expected to see gains:
- Class A motorhome shipments are set to rise 20% to 6,100 units.
- Class B motorhomes will hit 1,400 units on 17% growth
- Class C motorhomes will increase by 30% to 6,900 units.
During his talk, Coon briefly outlined RVIA’s plans to lead celebrations of the RV industry’s 100th anniversary in 2010, and encouraged industry members to take part in noting the proud past and bright future of the industry. “As we head into a new year, we should all resolve to have the courage to believe in our industry’s recovery, and resolve to overcome these difficult times” he said.
Despite recent recessionary setbacks, relative gains posted thus far this year by travel trailers are pointing to a “road to recovery” for the RV industry, Richard Curtin, director of consumer surveys at the University of Michigan, reports in his fall “Roadsigns” prognostications for the Recreation Vehicle Industry Association (RVIA).
“Total RV shipments were 42,300 in the second quarter of 2009,” he reports. “Although this was the lowest second quarter reading since 1982, year-to-year declines have begun to narrow, and signal that RV shipments are on the road to recovery. The greatest relative gains since the start of 2009 were made by travel trailers and the least by motorhomes.
“While total RV shipments are expected to fall to 146,200 in 2009, the low point was in the first quarter,” he adds. “RV shipments can be expected to begin posting seasonally adjusted gains in the balance of 2009 and into 2010. The gains will focus on conventional travel trailers during the next year or so, although all types of RVs will begin to improve.”
Looking ahead, Curtin predicts total shipments of 185,800 units in 2010, a 27% pickup from 2009 and a marginal upgrade from the 169,500 units he had forecast for 2010 back at RVIA Committee Week in June. While it’s definitely good news, those numbers still lag significantly behind the 237,000 shipments the industry posted in 2008 or, even more so, totals of 390,500 units in 2006.
Curtin looks for renewed RV sales growth in the second half of ’09 due to improved economic conditions and the easing of the financial crisis. On the other hand, he warns, lagging consumer demand will remain a factor through most of next year due to continued job losses, shorter work hours, smaller income gains, tight credit and declines in household wealth as well as Americans’ need to restore savings and pension accounts.
Most notably, he points out, motorhomes’ share of total shipments are expected to fall to 7.8%, about a third of the motorized share in 2000.
“After the energy shocks of the 1970s,” adds Curtin, “motorhome sales bounced back to capture one-third of the total market from 1983 to 1990. Likewise, the current dominance of travel trailers is likely to yield market share over time due to the downsizing of household tow vehicles.”
All in all, Curtin, however, continues to look for a slow – but certain – turnaround from the recent downturn.
“The recent financial meltdown has affected every aspect of the RV industry, including manufacturers, dealers and consumers,” says Curtin. “The transformation of the industry has only begun and can be expected to be more comprehensive and require more restructuring than following any prior recession. Unlike past recoveries, the full restoration of RV sales will be slow and uneven.
“Importantly, given the strong commitment of the consumers to the RV lifestyle, there is no question about the favorable prospects for the industry. It will simply take longer than usual for consumers to reestablish their economic footing following the longest and deepest recession since the 1930s. The same can be said about financial institutions as they have been slow to establish new regulations and restore more normal credit flows, a key to a healthy RV industy.”
Editor’s Note: This is a recent installment of MSNBC.com’s Elkhart Project examining the impact of the recession on the RV industry.
Bill and Esthermay Brooks are nomads of the Interstate system. They’ve crossed the continental United States five times over the last 15 years, chalking up visits to all the lower 48 states in their national roving. They plan to steer their 35-foot-long Georgie Boy Pursuit motor home north to visit the 49th state, Alaska, in 2011.
“Our longest trip was five and a half weeks – we drove 10,000 miles and visited 22 states and Canada,” said Bill Brooks, a police officer from Cobb Island, Md. “Eventually, we have a goal of spending a whole month in every state. We want to do it while we’re still young enough.”
The Brooks, both 55, are living a peculiarly American dream. They are fierce adherents of the RV lifestyle, a strange blend of individualism and wanderlust that drives thousands of Americans to spend their summers barreling down the nation’s highways and back roads, stopping at campgrounds and meeting up at gatherings of other recreational vehicle enthusiasts.
But the RV lifestyle has stalled in recent years.
While a record 8.2 million RVs are crisscrossing the nation’s roads, it has been a terrible year for the industry. RV sales have plunged 65% from their peak just a few years ago, and the deep recession has hit the core RV demographic of those aged 40 to 60 particularly hard. They have endured sharp losses in their home values, stock portfolios and household wealth. Experts don’t expect much of a sales rebound for years to come.
“These factors have really hit the industry hard, and I think 2009 will be a tough one for the industry,” said University of Michigan economist Richard Curtin, who studies the RV industry. “I think we’ll see fewer RVs sold than at any time since 1980.”
When gas prices hit $4 a gallon last summer, many RVers left their motorhomes in the driveway rather than shoulder the cost of a vehicle that might get only, at best, 10 miles per gallon.
RV sales have cratered since hitting a peak of 390,000 units in 2006. Curtin expects sales of just 136,500 units this year, down 65% from the peak. Sales could rise to about 169,500 units in 2010, Curtin said, although given the uncertain economic outlook the figures could change by 15% in either direction, he said.
While the weak economy has dented the RV business, it’s not a complete write-off, Curtin said. He says campgrounds and national parks are reporting strong RV visits, with some completely booked for the summer. This underscores the strong American desire to camp and travel, and it’s why he thinks the RV industry eventually will bounce back.
“The RV industry follows the cycles in the economy. When times are good, RV sales are good, but when the economy goes bad, RV sales are terrible,” he said. “It will take time for the industry to fully recover.”
The slow recovery means trouble for the nation’s RV manufacturers and dealers. When industry sales peaked, the market was saturated with vehicles, said Curtin. Dealers are now trying to sell many of those vehicles at deep discounts, making new sales especially challenging, he said. In addition, credit is still hard to get for RV buyers.
That means more bad news for Elkhart, Ind., the center of the nation’s RV manufacturing business, where massive job cuts in the region’s manufacturing sector have helped to push the area’s unemployment rate to 17.5%, nearly twice the national average. Other RV manufacturing centers like Forest City, Iowa, where motorhome manufacturer Winnebago Industries Inc. is based, also are likely to suffer, said Curtin.
And RV dealers are feeling the pain. More so than cars, RVs are a luxury item that most consumers will put off buying during harsh economic times. In an industry research report published in April, market analysis company IBISWorld forecast that hundreds of RV dealers will go under as operators cut staff and reduce costs. IBISWorld expects the number of RV dealers to fall by 12% in 2009.
Industry revenue was down 22.5% to $15.5 billion in 2008, and a further decline of 19.6% is expected in 2009, with revenue sliding to $12.5 billion, according to IBISWorld.
Over the next five years RV sales are expected to rebound, supported by a stronger economy, with the biggest improvement expected in 2011 and 2012, according to IBISWorld.
Curtin is also bullish on the RV life, with its opportunities for camping, fishing and visiting national monuments. Many younger RVers are taking up the pastime, and the industry is moving forward with more lightweight, fuel-efficient and “greener” RVs, he said.
Greener, lighter RVs
“The buzz in the industry is how can we adapt and change to deal with the poor sales,” he said. “After all, this is essentially a small house on wheels and it uses a lot of energy, primarily for driving and cooking, so there are lots of opportunities to save and conserve energy. For this reason I think the industry is determined to make sure they can have green and more energy efficient units all round.”
Earlier in the decade, when large sport utility vehicles were the rage, there was strong demand for large, towable travel trailers and “fifth-wheel” trailers, which make up about 80% of RV sales. With a trend toward more sales of smaller, more fuel-efficient cars, RV manufacturers are going to have to find ways to make their vehicles lighter and more easily towed, said Curtin.
The RV industry has developed few new products in recent years, slowing the industry’s growth. Only when RV manufacturers produce a vehicle that is green and fuel efficient will the industry see another group of strong growth years, noted IBISWorld in its report. This will be especially true if gas prices rise.
Demand from retiring Baby Boomers, broadly defined as those born between 1943 and 1965 and the largest market segment for RVs, also is expected to spur growth in sales.
According to an estimate from the Recreation Vehicle Industry Association (RVIA), up to 30 million people consider themselves RV enthusiasts. A typical RV owner is in his or her mid-50s, married, owns a home and has an annual household income of over $70,000.
For the Brookses, an RV trip is quite simply the cheapest vacation around. When they weighed an RV trip against taking an airplane and staying at a hotel, the RV option worked out to be about 50% cheaper.
Bill Brooks figures he saves close to $100 a day in food alone by cooking in the RV instead of eating out.
Then there are the intangible benefits of being on the open road, he said.
“When you’re sleeping in a RV, you know who slept in that bed last night, and you know who washed those dishes or cleaned that glass,” said Bill Brooks. “So having that peace of mind, that’s the mindset of many campers. They like to be in their own space with their own things.”
“My sister’s idea of roughing it is a hotel without room service – she wants to jet to wherever she’s going and get there and back as quickly as possible, but RV-ers like to stop and smell the roses,” he said. “They like to pull over and read a road sign, or see a historic market; they want to travel the blue roads, meet the locals and talk to them.”
Sales have picked up for Newmar Corp.’s towable and core diesel and gas products, according to company executives attending the 8nd Annual Family Motor Coach Association Convention (FMCA) in Bowling Green, Ohio, which ended Thursday.
”We’ve been in production either four or five days a week for the last 12 weeks,” said Kyle McCrary, director of luxury products and product design for the Nappanee, Ind., manufacturer. ”Our towables and our core diesels and gas (motorhomes) are doing extremely well. The high-end is still a little slow, a little challenging.”
Newmar Chairman Matt Miller also said that Newmar’s recently announced program of providing maintenance and repairs for non-Newmar products has gone well. ”We see a need for disenfranchised owners who perhaps don’t have a place to go to get service,” Miller said.
About 2,600 coaches pre-registered for the FMCA convention on the grounds of Bowling Green State University and Wood County Fairgrounds about 25 miles south of Toledo.
While not suggesting that things have turned around completely, McCrary said that Newmar expects business to pick up in 2010, primarily agreeing with Richard Curtin of the University of Michigan for the Recreation Vehicle Industry Association (RVIA) who estimates that wholesale shipments will increase by 24% next year.
”We are gaining market with our gas products,” McCrary said. ”Some of that has to do with changes that we made in our products, but it also has to do with some of the economic issues that our competitors have faced.”
He said some prospective high-end buyers are concerned about the tax policies that are being discussed in Congress and by the Obama administration.
McCrary noted that ”financial issues” are continuing to vex the industry, on both the wholesale and retail sides of the equation but not to the degree they did earlier in the year.
”We are seeing a definite turn, a trend,” McCrary said. ”We are seeing us start to move out of this bottleneck that was created by the lack of banks’ lending money, whether it was on the wholesale or retail end of it.
”But the (lack of credit) has created a huge pent up demand,” he said. ”When this thing does finally move, we are ready for it. We see that it is happening. It is definitely coming.”
The recreation vehicle industry’s shipments are projected to total approximately 169,500 units in 2010 – a 24% increase from the 136,500 predicted for 2009 – according to a new forecast by RV industry analyst Richard Curtin, released at the Recreation Vehicle Industry Association’s (RVIA) Annual Membership Meeting today (June 9).
Seasonally adjusted shipments reached their low point in the first quarter of 2009, and gains are expected over the next two years as the negative financial factors that caused the steep drop in RV sales will slowly give way to improved conditions in the market.
Curtin, director of consumer surveys at the University of Michigan, which produces the closely watched monthly Index of Consumer Sentiment, briefed RVIA members on his analysis of the industry’s future at RVIA’s annual Committee Week, being held this week in Washington, DC.
“The persistent appeal of the RV lifestyle as well as the good economic value provided by this form of recreation will energize future growth in the RV market, once again driving the RV market to higher levels,” said Curtin.
In addition, RVIA President Richard Coon addressed key issues critical to the industry’s long-term profitability, including the need to continue RVIA’s work to secure sufficient RV wholesale and retail financing, vehicle fuel economy, and the growing “green” movement.
Curtin said there is considerable uncertainty about the future course of the economy as well as future RV sales. This uncertainty means that RV shipments in 2010 could as much as 15% more or less than his forecast.
“This is the longest and deepest U.S. recession of the past half century,” said Curtin. “However, while fluctuations in sales are expected, there has been no change in the strong preferences expressed by consumers for the RV lifestyle.”
Consumer confidence has surged in recent months because of optimism about the Obama administration’s economic stimulus efforts and financial reforms, which RVIA worked hard to be sure included the RV industry. While these programs will aid consumers, Curtin said the pace of gains in RV sales will be more gradual than in the initial phase of past recoveries because of lingering effects from the credit crisis, slow economic growth and higher levels of unemployment. In addition, the priorities of many consumers have shifted toward debt repayment and restoration of savings and retirement accounts.
Curtin emphasized that economic adversity has caused consumers to postpone the purchase of an RV but not to forsake their commitment to the RV lifestyle.
“The RV industry is in the business of helping families form lasting bonds and having a great time getting outdoors,” said Coon. “Those are core American values that will endure and create a lasting demand for RVs.”
The ongoing recession and tight credit will continue to affect RV sales in 2009, according to the latest research of economist Richard Curtin, director of Consumer Surveys at the University of Michigan.
In his Summer issue of Roadsigns, which is prepared for members of the Recreation Vehicle Industry Association (RVIA), Curtin said RV shipments are expected to decline to 136,500 units this year. While this estimate is well below his forecast of 186,600 issued last November, it is a slight improvement from his forecast that appeared in the Spring 2009 Issue of Roadsigns, when he estimated total shipments this year would retreat to 130,100 units
Curtin will expand upon his latest forecast as one of the featured speakers at RVIA’s Committee Week, which gets underway today in Washington, D.C.
“They (shipments) reached a lowpoint in the first quarter of 2009, and can be expected to begin posting small seasonally adjusted gains in the balance of 2009 and into 2010,” Curtin stated. First-quarter shipments totaled 30,400, off 63% from the first quarter of 2008.
“The gains will be focused on conventional travel trailers during the next year or so, although all types of RVs will improve,” he said.
Further, he stated, “The recession is expected to end by the close of 2009 due to the favorable impact of the stimulus package and the revival of more normal credit conditions. Unfortunately, the recovery is expected to be abnormally slow. The economic outlook still remains quite uncertain, which has clouded prospects for the RV industry as well.”
“The pace of the recovery in RV sales,” Curtin continued, “will be slowed by the shift in priorities among consumers away from spending and toward debt repayment and the building of savings and reserve funds, including their diminished retirement accounts. Although credit will not be as free-flowing as in the past, RV buyers are excellent credit risks and can be expected to return to the market.”
By segment, Curtin offered these shipments forecasts for 2009:
- Travel trailers, 82,600.
- Fifth-wheels, 29,500.
- Folding camping trailers, 10,900.
- Truck campers, 2,000.
- Class A motorhomes, 5,400.
- Class B motorhomes, 900.
- Class C motohomes, 5,200.
Uncertainty Clouds RV Forecast
Curtin concluded with the observation that his forecast bears some uncertainty. He said, “When the economy finally reaches the bottom of its cycle, the initial phase of the recovery is typically anticipated to be as rapid as the descent into recession. That’s a natural assumption since it mirrors the typical cyclical pattern of the past.
” The current recession, however, is hardly typical as it involved a virtual freeze of credit markets and the deepest and longest decline in production and income during the past half century. The full restoration of normal credit flows will be a painstakingly slow and uneven process.
“Moreover, the impact of the new financial regulations, which are as yet largely undeveloped, will continue to add uncertainty to financial markets and lenders. While RV shipments are forecast to be 136,500 in 2009, the range about this forecast is unusually large, plus or minus 15%, with a comparable range for all various types of RVs covered in this forecast.”
The University of Michigan also prepares a monthly report on Consumer Confidence, which took a big jump in May, according to the report.
In the current economic environment, the prospects for the upcoming year will be a prime focus of RVIA Committee Week next week (June 8-11) at the Willard InterContinental Hotel in Washington, D.C.
For one thing, economist Richard Curtin of the University of Michigan will present his 2010 retail sales forecast. ”A lot of people are going to be interested in hearing what Dr. Curtin has to say,” said Richard Coon, president of the Recreation Vehicle Industry Association (RVIA).
About 170 people representing manufacturers, dealers and suppliers will attend the four-day meeting two blocks from the White House that will culminate with an RVIA board meeting Thursday during which it is expected that the future of the September retail California RV Show in Pomona and the December National RV Trade Show in Louisville, Ky., will be high on the agenda.
“RVIA’s principal sources of revenue come from the Louisville and Pomona shows,” RVIA Chairman James Sheldon told RVBUSINESS.com. “Louisville will probably only be about two-thirds of what it was last year and the Pomona Show probably is going to be a third of the size it was last year.”
Although RVIA’s 2010 budget won’t be set until a board meeting in September, finances need to be addressed sooner than that, Sheldon said.
“One of the most critical issues we face as an association is how we fund the myriad of services we provide our members and still maintain the level of quality and responsiveness,” he said.
The board is likely to consider raising the cost of the RVIA seal which is affixed to towables and motorhomes that RVIA members build to let buyers know that they meet the association’s construction standards.
“The board is going to have to address the issue of our expenses exceeding our revenue,” Sheldon said. “We are rapidly burning through our reserves. This is going to test our mettle, but I have confidence that we will come up with the right answers to address these issues.”
Sheldon said that RVIA is sensitive to the state of the economy and the fact that many of its members face severe financial challenges. “We have to be very judicious about how we approach that subject so that we don’t harm the members in the process,” Sheldon said.
Seals currently cost $4.05 each with a $46 to $74 assessment added to each for the Go RVing market expansion campaign. Although Go RVing’s media budget has been trimmed from a high of $15.5 million in 2007 to $3.5 million this year, Coon said he doesn’t expect that the Go RVing assessment will be increased. “There might be some talk, but the proposal to do that didn’t fly with the board during the last board meeting (in March),” Coon noted.
Another major topic of discussion will be proposed franchise laws that have been wending their way through nearly two dozen state legislatures backed by state RV dealer associations. Although primarily aimed at protecting auto dealers from forced closures by auto manufacturers, most piggyback RV dealers and would require that RV manufacturers buy units back from dealers without cause, similar to a law in Texas that has been on the books for more than a decade.
“Most manufacturers feel this provision in the law in the various states is unfair,” said Sheldon, special assistant to the president of Monaco RV LLC. “It could become the most important issue that our industry faces. It literally could bring every RV company down to its knees.”
Sheldon said the RVIA board is expected to consider backing franchise legislation that applies specifically to the RV industry, a position it has taken in the past with only limited success.
During Committee Week, Sheldon will host the Chairman’s Luncheon on Monday to honor the service of Atwood’s Carl Pfalzgraf as chairman from 2006 to 2008, while Curtin will present his 2010 forecast during the Annual Membership Meeting during lunch Tuesday which will also will include reports on the state of the association from Sheldon, Curtin and Treasurer Don Walter.
The industry-wide Go RVing Coalition will meet Monday afternoon, and RVIA standing committees will meet Monday and Tuesday to act on recommendations that will be passed on to the board for consideration during its Thursday meeting.
Then, on Wednesday RVIA members will meet with federal legislators and their staffs for the 7th Annual Advocacy Day to discuss legislative issues.