N.J. Show Dealers Hope Sales Uptick Continues

When the economy faltered in 2007, the recreational-vehicle industry nosedived after five years of historic highs as Americans tightened discretionary spending and the credit market froze.

According to a report in the Press of Atlantic City (N.J.), sales of the camping-friendly vehicles now are rebounding, a welcome trend in a region home to most of the state’s campgrounds.

The Recreational Vehicle Industry Association (RVIA) reported 252,000 RV shipments in 2011, the industry’s highest in four years. And while the industry originally expected little growth in 2012, a recent uptick in sales and attendance at RV shows has analysts rethinking prospects for the year, said Kevin Broom, spokesman for RVIA.

“The RV industry has been a leading economic indicator for the past number of recessions,” Broom said. “RV shipments go down first because RVs are discretionary purchases that are typically financed. When consumer confidence drops, people aren’t as confident about borrowing money. We think the outlook has improved for 2012.”

RVs are a big player in the region’s tourism industry, which abounds with seasonal campgrounds. Cape May and Atlantic counties have about half of the state’s campgrounds, according to the New Jersey Campground Owners Association. Many others are in Ocean County.

Signs of growth will be sought at the annual Atlantic City RV Show running Feb. 17-19 at the Atlantic City Convention Center.

The show has a big impact at Driftwood RV Center, which has locations in Dennis and Egg Harbor townships, said John Worthington, marketing director for the business.

“It’s a huge percentage of our first quarter, but more than that it sets the tone for the year,” Worthington said. “If you have a strong show, there will be a lot of people who go to the show, get excited, but may not be ready to pull the trigger. But a month and a half after the show, some will return to the dealership.”

The nationwide RV industry hit a low in 2009, when 165,000 units were shipped, the industry association said. That was the second consecutive year in which shipments dropped about 30%. Shipments represent new RVs delivered from manufacturers to dealers.

In 2006, 390,500 RVs were shipped, the highest number in more than 30 years.

Broom said the industry saw a turnaround in 2010, when shipments rose to 242,300, a rise of 46% from the previous year. Shipments rose about 4% in 2011, he said.

As the industry experienced these changes over the past five years, many RV manufacturers redesigned products, using different materials to make them lighter and more fuel efficient, Broom said. Towable RVs make up more than 85% of sales, he said.

As Americans’ preferences shifted from large SUVs to smaller vehicles, manufacturers began producing lighter trailers that could be towed by smaller vehicles such as minivans and crossovers, he said.

Worthington said Driftwood has seen that trend as well, as more shoppers search for environmentally friendly construction and lighter vehicles.

“They’re making them lighter, easier to tow,” he said. “People may not have the sizeable trucks they had a few years ago.”

 

 

RVDA Probing Potential CFPB Dealer Regulation

The Recreation Vehicle Dealers Association (RVDA) is investigating why the Consumer Financial Protection Bureau (CFPB) intends to regulate recreational vehicles even though Congress specifically exempted traditional RV dealers and the products they sell from CFPB oversight.

In 2010, RV dealers were given a pass from CFPB oversight in return for more vigorous scrutiny by the Federal Trade Commission (FTC). Now, however, RVDA said it appears that the CFPB is formalizing a back route to regulate RV dealers when they sell RVs to full-timers.

The bureau intends to adopt a slightly modified version of the Truth-In-Lending-Act’s Regulation Z that may draw RV dealers back into its purview in certain sales transactions. At issue, once again, is whether recreational vehicles are considered dwellings.

RVDA is drafting its fourth set of federal comments to clarify the “dwelling” issue and, more importantly, whether the CFPB has the legal authority to regulate RV dealers under Regulation Z.

 

RVDA Poll: Most Dealers Upbeat on Coming Year

Dealers surveyed in January generally have an upbeat outlook for the 2012 retail market and most feel their inventory levels are just right, according to the latest issue of RV Executive Today Online.

About 58% believe the RV retail market in January was the same as it was a year earlier, and 42%t believe it was better.

The survey showed that 75% of the respondents say there’s an adequate amount of credit available for inventory financing, and 71% say there’s adequate credit available for their retail customers.

For more survey results and charts, see the March issue of RV Executive Today, coming soon.

RVDA’s Molino to Retire, Ingrassia Will Succeed

Recreation Vehicle Dealers Association (RVDA) President Mike Molino announced today (Feb. 9) that he will step down after 16 years of service as the CEO of the organization. The RVDA board named Vice President for Communications Phil Ingrassia as the association’s next president, effective April 2.

“Mike Molino’s impact on RVDA and the RV industry will last for years to come,” said RVDA Chairman Andy Heck of Alpin Haus in Amsterdam, N.Y. “He has been a strong advocate for RV dealers since he joined the association in 1988 and became the chief staff officer in 1996. Mike was instrumental in developing a strategic direction for the organization that will shape RVDA far into the future. We are fortunate to have an experienced successor in Phil Ingrassia, who is well qualified to manage a smooth transition of staff leadership and set the stage for continued success.”

“For over 50 years, I have been lucky enough to have had continuous employment with only two employers, the U.S. Army and RVDA,” Molino said. “The nature of the work in both organizations provided opportunities to work for more than 50 different bosses and with many great people. The staff at RVDA present and past stands out as the best team of colleagues that I have ever had. I can’t thank them enough for their loyalty and support. I am especially indebted to Vice President for Administration Ronnie Hepp who has been with us for 17 of my almost 24 years at RVDA and Vice President for Communications Phil Ingrassia whom I recruited 16 years ago when I became CEO. My life epitomizes the adage ‘do what you love and you will never work a day in your life.’”

Molino continued “It is time for someone with new energy and ideas to head the staff of RVDA. Last year, I asked the RVDA Board of Directors to start the process of finding a new president. It makes me proud to know that they saw the same great value in Phil Ingrassia’s talents and skills that I enjoyed for the past 16 years. I am delighted with their selection. Although I plan to be active in a different type of work, I will remain available to assist RVDA President Ingrassia in any way possible for as long as he desires.”

During Molino’s years with RVDA, the association extended its leadership role in RV industry affairs through development of the association’s Model Dealer Agreement and the Dealer Satisfaction Index (DSI) survey. Molino was a key leader in the formation of the RVDA Education Foundation, now known as the RV Learning Center, and also a strong supporter of continuing education and certification for RV dealership employees. During Molino’s tenure, RVDA also played a key role in the formation of the Go RVing Coalition’s national advertising campaign, which is co-owned with the Recreation Vehicle Industry Association (RVIA). Molino is a Certified Association Executive (CAE) and was elected to the RV/MH Hall of Fame in 2006.

Ingrassia has served as RVDA’s vice president for communications since 2002 and joined the RVDA staff in 1996. He supervises the association’s membership, industry relations, market expansion and communications programs. He serves as RVDA’s staff liaison to the Go RVing Coalition and also earned the CAE designation.

“I am honored that the Board of Directors has chosen me to help lead the next chapter in RVDA’s history,” Ingrassia said. “Mike Molino has been an excellent mentor to me as well as to others on the staff and within the RV industry. I look forward to working with our volunteer leaders, members, business partners, and staff to advance the RVDA and the industry.”

 

 

 

Family Tree RV Brand Looks to Grow Franchises

A northern Illinois-based RV-dealership buying group moved ahead in mid-January with a plan to sell a new kind of RV dealership franchise.

Family Tree RV Franchise Brand Management Inc., headed by Tom Enyeart, owner of Shabonnah Creek RV in Atkinson, Ill., has solicited 400 RV dealerships to purchase franchises.

Enyeart said the goal of the group, which is asking franchisees to pay a $49,900 annual fee and to make a minimum two-year commitment, is to ”level the playing field” with regard to the wholesale price RV manufacturers sell their products.

”We are going to use the collective of our dealerships to get the fairest price — not the lowest price,” Enyeart said.

Enyeart complained that some manufacturers sell units to large-volume wholesale buyers at thousands of dollars less than the cost to smaller stores, putting them at a major disadvantage.

”If manufacturers knew what was good for them, they would level the playing field themselves and there wouldn’t be a need for a collective buying group,” said Enyeart, whose 31-year-old dealership retailed $6 million in RVs in 2011.

Enyeart is president of the organization and his wife Vicky is vice president.

Dealerships that purchase Family Tree RV franchises would be required to change the name of their stores to reflect the Family Tree brand, pay the legal fees needed to establish a ”dba,” and buy uniforms and stationary.

”It will no longer be ‘Joe’s RV,”’ Enyeart said.

Family Tree Brand Management would provide a mixture of radio, online and cable TV advertising, initially on a regional basis, and, when the group has 150 members, nationally. Eventually, Family Tree dealerships would be offered collective employee benefits, insurance, wholesale financing and in-house warranties along with other products and services.

”It’s a remarkable deal,” Enyeart said. ”For most of us ($49,900) is chump change. Most dealers understand the big picture and will recoup the $49,900 by four or five times every year, easily.”

The only requirement to buy a franchise is that the dealership be ”genuine” with a building that provides service and sells parts.

Two manufacturers — Riverside Travel Trailers Inc., Peru, Ind., and EverGreen Recreational Vehicles LLC, Middlebury, Ind. — have agreed ”that they will provide us the best pricing on their product,” Enyeart reported, adding that he expects other manufacturers to follow suit.

Family Tree’s goal is to sell 50 franchises by June 1. ”We’re not certain we will attain it or not, but that is our goal,” Enyeart said.

Because of the legalities involved in selling franchises, none have been sold yet, he said.

”Shabonna Creek will probably become the first Family Tree dealership,” Enyeart said.

 

 

Camping World Gains Multi-Year Floorplan Loan

Camping World RV Sales, one of the nation’s leading RV retailers, announced today (Feb. 7) that it has closed a multi-year syndicated credit facility quickly approaching half a billion dollars, consisting of an amended floorplan credit facility and a letter of credit facility.

According to a press release, Bank of America, N.A., which serves as the administrative agent, led the transaction while JP Morgan, which has partnered with the company since 2003, acted as co-agent. The facility also includes seven U.S. lenders: US Bank, SunTrust, Key Bank, M & T Bank, Bank of the West, Ally Bank and Flagstar.

“Our company’s double digit return in same store sales along with an unprecedented level of profitability has earned us a multi-year facility,” Marcus A. Lemonis, Camping World chairman and CEO stated. “Our top line outlook for 2012 remains flat to slightly up. However, our tight inventory controls and right sized SGA has us well positioned for another solid financial performance.”

Floorplan financing is a line of credit that allows dealers to borrow against their inventory, and then repay that debt as they sell their inventory or borrow against the line of credit again to add new inventory, the release states.

 

 

 

Mike Thompson’s RV Hosting Annual I-405 Show

Multi-location California dealer Mike Thompson’s RV will be hosting the 10th edition of the I-405 Orange County RV Show Jan. 20-29.

According to a press release, in addition to RV sales the show will feature seminars and on-site manufacturer representatives to assist new RVers in learning more about the lifestyle and update current RVers on new technology offered.

“Our customers become part of our family and we want to make sure every customer is comfortable and enjoying their RV,” said Sales Director Mark Rosenbaum. “This is our 10th year anniversary so we want to make it special for our customers at the I-405 RV Show.”

A full range of products will be on display, including the Shockwave toy hauler by Forest River Inc., which Mike Thompson’s RV recently took on.

“Toy haulers represent the largest growth of 2011 at Mike Thompson’s RV – this segment is up 123% over the previous year,” said Rosenbaum. “Customers want to take their toys with them and still have the comforts of home. Shockwave has outstanding cutting-edge interiors and comes equipped with the amenities that the off-road enthusiast is looking for.”

For more information visit www.mikethompson.com.

 

Giant Recreation World Announces Two Key Hires

Giant Recreation World, a leading Central Florida RV dealership, announced the addition of two key personnel at the company’s Winter Garden headquarters. Matthew Harrison has been named director of marketing and Vincent Caliendo appointed corporate webmaster.

According to a press release, Harrison brings extensive marketing and public relations experience to the position. He holds a bachelor’s in communications from the University of Central Florida and an associate degree in marketing. In this position, Harrison will develop new advertising campaigns throughout Central Florida that focus on the values that Giant Recreation World brings to the consumer.

Caliendo has a bachelor’s from the University of Phoenix in Information Technology. As the corporate Webmaster, he will be responsible for continuously upgrading the company’s website to display and provide customers enhanced capabilities in performing dynamic searches of product and services information.

Giant Recreation World CEO Don McNamara noted, “I am pleased to attract these talented individuals to our organization. Matthew and Vincent will contribute significantly to our ongoing growth.”

Founded in 1976, Giant Recreation World has 90 sales and service employees in three Florida locations: Winter Garden, Melbourne and Daytona Beach. For additional information visit www.giantrecreationworld.com.

 

Baird: Retail Sales Improve as Confidence Grows

Editor’s Note: Robert W. Baird & Co. conducted a quarterly survey of 122 RV dealers to assess recent trends. The following offers a summary of the results.

Retail improves as confidence rebounds. Retail improved during the seasonally weak quarter as consumer confidence rebounds. Inventory is healthy, but dealers may defer orders after taking advantage of incentives at the fall Elkhart show. We see value for patient investors and note a recent lift in investor sentiment after an awful year.

• Decent off-season retail: Traffic was mixed, but dealers reported growth in motorhomes (+5-7%) and towables (+7-9%) during the seasonally weak December quarter. Better consumer confidence and favorable weather appeared to help. Separately, Statistical Surveys Inc. reported that U.S. motorhome retail improved 2% in November, corroborating our observations.

• Inventory levels hold steady: Dealers report 117 days of towable inventory (down from 119 days last year) and 127 days of motorhome inventory (down from 133). However, some dealers are still taking delivery on orders placed at the fall Elkhart show, which offered heavy incentives on towables. Thirty five percent of towable dealers consider inventory “too high” versus just 15% of motorhome dealers.

• Dealer sentiment rises above key threshold: Dealer sentiment rose above 50 for the first time since October 2007, hitting 55 in our most recent survey of current conditions (50 is neutral). The move coincides with a recovery in consumer confidence we consider essential to a broader recovery in the RV sector.

• Credit trends remain favorable, but unchanged: Access to both wholesale and retail credit remains healthy, but largely unchanged. Dealers liked the GE Capital promotion, which covered floorplan interest costs through the winter on product from Thor and Forest River.

• Outlook: After an awful year for RV stocks, investor sentiment is beginning to recover as consumers and dealers grow more optimistic. We see value for patient investors, noting that inventory is healthy and expectations for 2012 retail seem reasonable (Thor retail up 3%, Winnebago up 1%), setting the stage for better shipments if the economy recovers. Thor has $3.77/share in cash and no debt, with a chance to earn over $3/share in a recovery scenario. Meanwhile, Winnebago has $2.45/share in cash and no debt, with the potential to earn over $1/share in a recovery scenario.

Note: Contact your Baird representative for a complete copy of our 39-page dealer survey.

 

 

 

 

Auction123 Increases Functionality for Retailers

Auction123 Inc., an inventory management, website development and online marketing software provider for dealers, announced the addition of RV model data to their dealer platform. Auction123 said dealers will benefit from the addition of automatically populated specifications and features integrated within RV presentations for their Auction123 website, eBay listings, Craigslist postings, Facebook showroom and any automated data exports to sites such as RVTrader.com.

Available for units 2008 or newer, the enhanced data will be populated based on the vehicles’ year, make (manufacturer), model (brand) and trim (style). The data contains up to 150 specifications including information about the units’ entertainment features, instrumentation and living area amenities. In addition to the data, the Auction123 system will automatically append a stock image and floorplan to the listing when available.

“RV dealers understand the importance of getting their inventory on the Internet quickly,” said Auction123 President Ray Basha. “Our goal is to make this process as easy as possible for our dealers. By adding this supplemental data to our system, they can instantly and descriptively advertise their units for sale online before even taking the photos.”

This functionality is accessible to all dealers with an Auction123 account, regardless of service or package level. To receive information on Auction123′s software offerings for dealers of all vehicle categories, call (888) 514-0123.

 

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