Outlook 2011 Breakfast Kicks Off RVIA Show

Outlook 2011: A New Era Begins will kick off the National RV Trade Show on Tuesday, Nov. 30, with a lineup of insightful presentations that will focus on how the RV industry can meet the challenges and take advantage of the opportunities that a changing, more cost-conscious, linked-in market will present in 2011 and beyond, according to a news release.

The event will begin at 7 a.m. with a complimentary full breakfast in the South Wing Mezzanine Level Ballroom of the Kentucky Exposition Center in Louisville, Ky.

Recreation Vehicle Industry Association (RVIA) Chairman Gregg Fore will host the high-energy, multimedia program which will feature:

• Forging Our Future with Richard Coon sharing his thoughts on the important trends impacting the RV market and how RVIA is working to forge a bright future for the industry.
• Go RVing: Inspiration for a New Era with Go RVing co-chairs Bob Olson and Tom Stinnett joining RVIA’s Gary LaBella to introduce the new Go RVing Leads Plus program, report on the impact of the Ambassadors of Affordability campaign, and unveil new plans for 2011.
• RVIA Public Relations: A New Era of Possibilities with RVIA Public Relations Committee Chairman B.J. Thompson and LaBella discussing tools and strategies to maximize the exposure of RVing in a changing media landscape and sharing some of the resulting high-impact publicity that’s helping stoke demand for RVs.“This promises to be another tremendous Outlook event with a program that both informs and entertains,” said LaBella. “We expect attendees will enter the show excited about the prospects for the RV industry as it enters a new era.”

‘How the Government Crimped the RV Market’

Editor’s Note: Annie Lowrey, a writer for The Washington Independent, wrote the following column.

In writing a short piece for the fifth anniversary of Hurricane Katrina, I ended up learning a bit about the market for recreational vehicles — campers, mobile homes, trailers, etc. And I ended up hearing about one of the very unintended consequences of Hurricane Katrina: The government kind of screwed up the American market for RVs.

The Recreation Vehicle Industry Association (RVIA) and a few dealers explained it to me this way. Through the 2000s, the market for RVs boomed, due to the economic good times and successful advertising campaigns targeted at younger buyers. By 2006, manufacturers were shipping 390,000 units per year to dealerships — a decent proxy for new-RV sales.

But RV sales are highly sensitive to high gas prices and recessions: RVs are generally a luxury item, not a necessity, and sales require good credit conditions because RVs can be quite expensive. (Apparently motorhome sales are a bit different: During downturns, some buyers that might have purchased a house will instead purchase a motorhome — though nice motorhomes cost more than small houses in many areas.) In 2007, manufacturers started producing far fewer vehicles, and sales of new RVs have plummeted more than 60 percent since the start of the recession.

The RV market is also unusual in that well-built American RVs tend to last for years, meaning that there is a vigorous resale market. (Your average RV will go through a number of owners, and a typical RV user might hang on to her camper for 20 years before deciding to buy a new or newer used one.) That means that while there are millions of RVs in circulation, relatively few new ones are manufactured per year.

Suddenly, in 2005, near the top of the RV production market for the decade, the government purchased approximately 145,000 RVs — meaning that rather than producing 3.7 percent more RVs in 2005 than in 2004, manufacturers actually made 43 percent more.

Soon after, the market for RVs seized up due to the recession. And soon after, the government started moving New Orleans residents out of the trailers and into permanent housing. In 2009, the government sold off more than 90,000s of those RVs — flooding certain sectors of the resale market and driving down prices during the worst of the RV recession. Needless to say, dealers aren’t particularly happy about that.

Click here to read her story titled “The Long Journey of the Katrina Trailers.”

Planning Continues for New Chinese Coach

Domestic U.S. RV industry suppliers apparently have worked through any concerns they may have had over working with a new Chinese motorhome manufacturer, according to Bill Horvath, project manager for the motorhome division of Yutong Bus Co. Ltd., which plans to enter the U.S. market by next spring with the En Route Class A motorhome.

More than 50 vendors, including three chassis manufacturers, have submitted quotes, reports Horvath, who hosted a breakfast meeting in Elkhart, Ind., six weeks ago to help kick off the venture.

“I am very pleased by the vendor turnout, interest in our project and their support,” Horvath tells RVBUSINESS.com. “Elkhart County has the best suppliers for our industry and their interest and willingness to work with Yutong Bus is terrific.”

Horvath’s business plan calls for mostly U.S.-made components for the En Route, which will be assembled in China and then shipped back to the U.S., entering this country at Portland, Ore. The U.S. distribution site will be near Eugene, Ore.

Nailing down a chassis supplier is a major concern at this point. In his original presentation, Horvath said the fiberglass-and-aluminum En Route would be available in 28- to 30-foot lengths on a 22,000-pound GVWR chassis equipped with 250/280 hp Cummins or Navistar rear diesel engines.

While he received three chassis bids, only two are “close to the platform definition” he was looking for.

“We continue to work with the chassis manufacturers and are very close to having final specifications completed,” he noted. “I need this information in order to move forward. The chassis specifications are not yet confirmed and our chassis wish list may be slightly different based upon available designs and engines.”

Horvath hopes to have the chassis contract signed, with delivery to Yutong’s factory in Zhengzhou by October and, best case scenario, production beginning in November.

Horvath, meanwhile, is now able to provide some price targets for the En Route.

“Our targeted dealer cost for a fully loaded coach — including equipment and features not usually found on this size and price point — delivered to the West Coast is under $140,000,” Horvath informed RVBUSINESS.com in an e-mail. “My estimated bill of material will need to be confirmed after prototyping, and final pricing will be set at that time. It is critical that retail pricing be held to under $200,000 for a fully loaded version.

“At this point our specifications, equipment and features, and standards and option list have remained intact, except for possible chassis details,” he continued. “Until final chassis information is completed later this month, I will safely say we are 80% there with our wish list.”

Horvath is attending the Caravan Salon RV show, which runs through Sept. 5 in Dusseldorf, Germany.

“The Europeans are the best at creating and using every square inch (or centimeter if you will) of space,” wrote Horvath. “Their motorhomes are considerably smaller, but they have everything one needs to travel and camp in comfort. I believe their style of product is in the future for the U.S.A.”

Horvath, by the same token, said he envisions the “En Route” as a less boxy line with simplified feature selections and exterior paint jobs and fewer slideouts. Interiors will be soft on the eye and feature plenty of radius touches.

One part of a 4.5 million-square-foot complex Yutong Bus is to begin building this fall will dedicated to En Route manufacturing.

“We will move into our new facilities sometime in 2012,” added Horvath. “Initial production will start in what we refer to as the ‘old complex’ where specialty products are currently being built.”

Elkhart Campers Inn Seeing Strong Traffic

Watch today’s Featured Video, courtesy of WSBT-TV, South Bend, Ind., about the following story on the new Campers Inn RV dealership in Elkhart, Ind.

There are more positive signs for Elkhart’s RV industry. A new dealership has recently opened its doors, and business is booming.

Before the economy took a turn for the worse, there were nearly a dozen RV dealerships in Elkhart. Now there are four, including the new dealership: Campers Inn.

Linda Herriott and her husband are in the market for a new RV.

“Well, we are looking for something we can live in full-time. Something that has got all the amenities,” Herriott said.

And they are not the only potential buyers out there. Just ask Tom Dewalt. “Business has been surprisingly strong. We have had a lot of traffic,” Dewalt said.

Dewalt is the location manager for Campers Inn, which just opened in July. Managers there have been keeping tabs on the number of customers, and last Saturday there were too many to count.

“It just says ‘Too many.’ We were just unable to keep up, so it just says ‘Too many.’ It was a crazy day,” said Dewalt as he displayed a customer log book.

Dewalt is certainly not complaining. In fact, on that Saturday, Campers Inn sold nine RVs. Dewalt said it could be a sign the industry is starting to rebound.

“I think the industry really bottomed out and is on its way back up,” he said. “I am not sure it is going to be a steep climb, but we will take it as we can get it, and we have been very happy with what we have been seeing so far.”

Dewalt said five more RVs were sold on Tuesday. And while he is cautiously optimistic a recovery is on the way, not every buyer who walks through the door is ready to spend money.

“We are just looking right now, probably won’t buy for a while,” said on browsing customer.

But at least they are looking.

Dewalt said Campers Inn has six locations around the nation and Elkhart’s sales numbers rank in the middle, which he says is pretty good for a brand new business.

RVDA Con/Expo Comes at Industry Juncture

The RV Dealers International Convention/Expo, scheduled for Oct. 4-8 at the Rio All-Suite Hotel & Casino in Las Vegas, Nev., comes at a crucial time for the U.S. economy in general and the RV industry in particular as both work their way out of the tough recession of 2008/2009.

On one hand, the industry’s rebound has exceeded expectations in many ways, especially for manufacturers, suppliers and retailers aligned with the right towable recreational vehicle brands. On the other hand, however, the aftershocks of the Great Recession are obviously still with us in terms of unemployment, stock market fluctuations and a general discomfort among many Americans with regard to the general state of the economy.

And while most Americans assume that the worst is over, many of the nation’s durable good manufacturers – including RV builders — are still looking to bridge their way to the next year and the next level of recovery and to find a comfort zone in this new post-recessionary age.

“There is a consensus we have to recalibrate our definition of what is a good business environment,” said Mike Molino, president of the Fairfax, Va.-based Recreation Vehicle Dealers Association (RVDA), lead sponsor of October’s annual Con/Expo. “We’re not going to get back to the 400,000-unit years any time soon. We’ll probably never return to that. The next couple of years will be tough, but doable. If dealers stay within the cash structure they have, they will survive. The consumer will come back — slowly. We won’t see a significant increase (in sales) until there is more certainty (about the state of the economy). I’m not so sure the election of 2010 will bring more certainty. That might just bring more confusion.”

But Molino, generally a realist, does tend to see the cup half full.

“The dealers who are still in business, for the most part, are the ones who will survive,” he maintained. “The dealers coming to the convention are in good shape. The shakeout is well on its way to being complete. But it’s not totally over. Dealers are telling me they have inventory but are paying more finance charges on the inventory they have than they used to, and retail financiers are very stringent on who they are lending money to, so the ability to buy a recreational vehicle, the threshold for buying, is higher and the ability to buy is a lot lower.

“Another dynamic is that there is uncertainty among businesses, both large and small, and that drives employment, and employment drives the mentality of the economy,” Molino continued. “When a consumer is hearing levels of unemployment we currently have (around 10%), it’s still not conducive to them going out and buying an RV, even if they can afford to get a loan for an RV. Until unemployment goes down and employment rises, we will have some issues.”

A New Era for the Industry As Well as RVDA’s Con/Expo

The RVDA is tackling this new era head-on with a refreshing revision of the annual convention, which is co-sponsored by RVDA of Canada and the RV Learning Center.

A crowd of between 475 and 550 U.S. and Canadian dealers, with total registrations of about 1,100 attendees, is anticipated for the five-day event.

“I think it’s going to be the best convention ever,” adds Molino. “We’ve got a very, very active committee under (Convention Chairman) Peter Albano. Between him and my staff and the volunteers on the committee, I think they have put together the most pertinent program for dealers and the management level of staff I’ve ever seen.”

As ever, of course, there will be an aggressive educational component including workshops on everything from wholesale and retail financing options to new inventory management strategies and how to reach new customers through innovative marketing communications. And the 2010 convention will again feature an exhibit hall filled with the RV industry’s leading OEM and supplier companies offering products and services to help dealers improve profitability.

But attendees will notice significant changes, starting with the brand committee meetings, closed door sessions in which dealers meet as a group with representatives of the recreational vehicle brands they carry. RVDA’s “Partners in Progress” brand committees, among other things, will work on important dealer-manufacturer issues and address results of RVDA’s Dealer Satisfaction Index (DSI).

“We’ve restructured the brand committees meetings, so they come early in the session,” Molino explained. “We tried to make it so there is no conflict between the committee meetings and anything else they want to do. I think it will enhance the experience for the dealers, especially the manufacturers.”

Before he took on the assignment of chairing this year’s convention committee, Albano confides, he talked with many dealers and asked them what they wanted with regard to the convention. “They said that we need to change and get some new blood into the system and see how we’re running the sessions, break it up and make it new,” Albano, owner of American RV in the Memphis suburb of Olive Branch, Miss., told RVBusiness. “We’ve worked very, very hard at doing that.”

Former Interior Secretary Kempthorne Will Keynote

Albano predicts that convention attendees will especially enjoy the remarks of former Interior Secretary Dirk Kempthorne, who will serve as keynote speaker at the first general session on Tuesday, Oct. 5.

“Secretary Kempthorne has a track record of developing innovative approaches to meet the outdoor recreation needs of RV travelers and other outdoor enthusiasts,” Albano said. “As a long-time motorhome owner, he is enthusiastic about the future prospects for our industry. He will provide an inspiring message for everyone who makes their living in the RV business.”

Kempthorne continues to champion outdoor recreation and is an active RV traveler and motorcyclist. As Secretary of the Interior during the George W. Bush administration, he brought fundamental relational changes in the environmental, conservation and outdoor recreation arenas.

During his service in the U.S. Senate, Kempthorne led successful efforts to create a sustainable funding source for building and maintaining trails and to promote balance between resource protection and outdoor fun – which is among the reasons he received the 20th Sheldon Coleman Great Outdoors Award in 2008 from the American Recreation Coalition (ARC).

A second general session, on Thursday afternoon, Oct. 7, will feature an “RV Outlook Panel Discussion” for which panelists will include Ron Fenech, president of Thor Industries Inc.’s RV Group; Craig Kennison, analyst with Robert W. Baird, Inc.; and Pete Lannon, GE Capital Commercial Distribution Finance.

Tom Walworth, president of Statistical Surveys Inc., Grand Rapids, Mich., will chair the discussion, which will focus on minimizing risk factors with RV floorplan loans, a manufacturing outlook on the future of RV product development and distribution, financial markets and the impact the issues will have on the dealers’ bottom lines.

“This session is sure to be extremely informative for everyone attending the upcoming convention,” said Albano. “It will provide some important steps that dealers can take to reduce their risk and successfully meet the financial challenges we are all facing today. The Convention/Expo Committee secured an outstanding group of RV industry experts to participate in this event.

RVBusiness HostsTop 50 Dealer Awards Festivities

Ann Coulter

RVBusiness magazine (and RVBUSINESS.com) will host its 3rd Annual RVBusiness Top 50 Dealer Awards during a Wednesday, Oct. 6, reception and dinner at the Rio hosted by Affinity Group Inc. President & CEO Mike Schneider and keynoted by conservative political commentator and author Ann Coulter.

While the award eligibility has been expanded this year to include recreational park model dealers – just as it was expanded last year to include Canadian retailers — the awards format will include five Blue Ribbon retailers and one individual receiving the Altman Lifetime Achievement Award.

The Go RVing Coalition Convenes at Con/Expo

Concurrent with RVDA’s convention agenda, the pan-industry Go RVing Coalition will convene 8-11 a.m., Wednesday, Oct. 6, in the Rio’s Tango Room to continue discussions of topics raised during the coalition’s last meeting June 8 during RVIA Committee Week in South Bend, Ind. This will likely include campaign planning, 2011 funding levels and development of the Go RVing consumer leads prioritization system approved by the coalition in June.

Along with recent shipment and retail data, the coalition will rely on a new University of Michigan RV market forecast and new ad tracking research. “Go RVing’s 2010 ad tracking research will be complete, giving us a better handle on the impact of our media mix and the Ambassadors of Affordability creative,” reports Gary LaBella, vice president and chief marketing officer for the Recreation Vehicle Industry Association (RVIA) and the coalition’s staff liaison.

Additionally, LaBella says results of the new study of Go RVing leads over the past three years will be reported by The Richards Group, the coalition’s Dallas-based agency. “This study will enable us to better prioritize leads, to provide more information to users about the specific products and price ranges consumer are considering, the lifestyle attributes of our leads and which media are most effective in delivering them,” he said. “All of this information will be helpful to future Go RVing media and creative planning as well as industry marketing efforts.”

Baird Adjusts Estimates as RV Rebound Slows

Editor’s Note: Robert W. Baird & Co. recently issued a client newsletter on RV industry investments. Excerpts from that newsletter follow.

Action

Adjusting estimates. We maintain a cautious consumer outlook as confidence falls, unemployment festers, consumers reduce debt and tax policy targets discretionary wealth. Meanwhile, the housing recovery has stalled and the stock market has faltered, leaving consumers feeling less wealthy. We are adjusting our estimates to reflect these realities, but consider shares oversold and would look for a better exit point. The election cycle or a change in tax policy could provide the short-term catalyst.

Summary

Reducing estimates as economic recovery stalls. We are lowering our estimates to reflect a flatter recovery. The RV sector depends on the confidence and wealth of those that enjoy the lifestyle. With high unemployment, the end of home-buyer tax subsidies, the flash crash and tax policy targeting the dollars consumers would otherwise use to buy an RV – the robust recovery we’ve seen in past cycles may not recur. Still, many consumer discretionary stocks appear oversold, in our view, suggesting investors may get a better price to exit. We point to the November election or a change in tax policy as potential catalysts.

Recent trends. Through June, RV sales are up 10% at retail, including an 11% increase in towables and 6% increase in motorhomes. Wholesale shipments are up 86% YTD, including a 86% increase in towables and 137% increase in motorhomes as dealer orders return to a normal restocking pace following a deep destocking cycle.

Thor. We are reducing our F2011 EPS estimate for Thor to $2.10 from $2.35; consensus is $2.41. The forecast assumes 68.8K towables and 4.2K motorhomes. We note that Thor recently launched a new RV company (Redwood).

Winnebago. We are lowering our F2011 EPS estimate for Winnebago to $0.24 from $0.43. Consensus is $0.54. The forecast assumes 4.5K motorhomes sold at retail (+6%) and 4.6K motorhomes sold to dealers.

To subscribe to this and other Baird reports, Contact Craig R. Kennison, CFA, at ckennison@rwbaird.com or call him at (414) 765-3870.

‘The Smithsonian’ Recognizes RV Centennial

 

Editor’s Note: The following story appears in the current issue of The Smithsonian.

Every Dec. 15, Kevin Ewert and Angie Kaphan celebrate a “nomadiversary,” the anniversary of wedding their lives to their wanderlust. They sit down at home, wherever they are, and decide whether to spend another year motoring in their 40-foot recreational vehicle.

Their romance with the road began six years ago, when they bought an RV to go to ”Burning Man,” the annual temporary community of alternative culture in the Nevada desert. They soon started taking weekend trips and, after trading up to a bigger RV, motored from San Jose to Denver and then up to Mount Rushmore, Deadwood, Sturgis, Devil’s Tower and through Yellowstone. They loved the adventure, and Ewert, who builds web applications, was able to maintain regular work hours, just as he’d done at home in San Jose.

So they sold everything, including their home in San Jose, where they’d met, bought an even bigger RV, and hit the road full time, modern-day nomads in a high-tech covered wagon. “What we’re doing with the RV is blazing our own trail and getting out there and seeing all these places,” Ewert says. “I think it’s a very iconic American thing.”

The recreational vehicle turns 100 years old this year. According to the Recreation Vehicle Industry Association (RVIA), about 8.2 million households now own RVs. They travel for 26 days and an average of 4,500 miles annually, according to a 2005 University of Michigan study. The institute estimates about 450,000 of them are full-time RVers like Ewert and Kaphan.

Background

Drivers began making camping alterations to cars almost as soon as they were introduced. The first RV was Pierce-Arrow’s Touring Landau, which debuted at Madison Square Garden in 1910. The Landau had a back seat that folded into a bed, a chamber pot toilet and a sink that folded down from the back of the seat of the chauffeur, who was connected to his passengers via telephone. Camping trailers made by Los Angeles Trailer Works and Auto-Kamp Trailers also rolled off the assembly line beginning in 1910. Soon, dozens of manufacturers were producing what were then called auto campers, according to Al Hesselbart, the historian at the RV Museum and Hall of Fame in Elkhart, Ind., located in a region that produces 60% of the RVs manufactured in the United States today.

As automobiles became more reliable, people traveled more and more. The rise in popularity of the national parks attracted travelers who demanded more campsites. David Woodworth — a former Baptist preacher who once owned 50 RVs built between 1914 and 1937, but sold many of them to the RV Museum — says in 1922 you could visit a campground in Denver that had 800 campsites, a nine-hole golf course, a hair salon and a movie theater.

The Tin Can Tourists, named because they heated tin cans of food on gasoline stoves by the roadside, formed the first camping club in the United States, holding their inaugural rally in Florida in 1919 and growing to 150,000 members by the mid-1930s. They had an initiation; an official song, “The More We Get Together;” and a secret handshake.

Another group of famous men, the self-styled Vagabonds — Thomas Edison, Henry Ford, Harvey Firestone and naturalist John Burroughs —caravaned in cars for annual camping trips from 1913 to 1924, drawing national attention. Their trips were widely covered by the media and evoked a desire in others to go car camping (regular folks certainly didn’t have their means). They brought with them a custom Lincoln truck outfitted as a camp kitchen. While they slept in tents, their widely chronicled adventures helped promote car camping and the RV lifestyle.

Decades later, CBS News correspondent Charles Kuralt captured the romance of life on the road with reports that started in 1967, wearing out motorhomes by covering more than a million miles over the next 25 years in his “On the Road” series. “There’s just something about taking your home with you, stopping wherever you want to and being in the comfort of your own home, being able to cook your own meals, that has really appealed to people,” Woodworth says.

The crash of 1929 and the Depression dampened the popularity of RVs, although some people used travel trailers, which could be purchased for $500 to $1,000, as inexpensive homes. Rationing during World War II stopped production of RVs for consumer use, although some companies converted to wartime manufacturing, making units that served as mobile hospitals, prisoner transports and morgues.

After the war, the returning GIs and their young families craved inexpensive ways to vacation. The burgeoning interstate highway system offered a way to go far fast and that combination spurred a second RV boom that lasted through the 1960s.

Motorized RVs started to become popular in the late 1950s, but they were expensive luxury items that were far less popular than trailers. That changed in 1967 when Winnebago Industries Inc. began mass-producing what it advertised as “America’s first family of motorhomes,” five models from 16 to 27 feet long, which sold for as little as $5,000. By then, refrigeration was a staple of RVs, according to Hesselbart, who wrote “The Dumb Things Sold Just Like That,” a history of the RV industry.

“The evolution of the RV has pretty much followed technology,” Woodworth says. “RVs have always been as comfortable as they can be for the time period.”

As RVs became more sophisticated, Hesselbart says, they attracted a new breed of enthusiasts interested less in camping and more in destinations, like Disney World and Branson, Mo. Today, it seems that only your budget limits the comforts of an RV. Modern motor homes have convection ovens, microwaves, garbage disposals, washers and dryers, king-size beds, heated baths and showers and, of course, satellite dishes.

“RVs have changed, but the reason people RV has been constant the whole time,” Woodworth says. “You can stop right where you are and be at home.”

Ewert chose an RV that features an office. It’s a simple life, he says. Everything they own travels with them. They consume less and use fewer resources than they did living in a house, even though the gas guzzlers get only eight miles a gallon. They have a strict flip-flops and shorts dress code. They’ve fallen in love with places like Moab and discovered the joys of southern California after being northern California snobs for so long. And they don’t miss having a house somewhere to anchor them. They may not be able to afford a house in Malibu down the street from Cher’s place, but they can afford to camp there with a million-dollar view out their windows. They’ve developed a network of friends on the road and created NuRvers.com, a Web site for younger RV full-timers (Ewert is 47; Kaphan is 38).

Asked about their discussion on the next December 15, Ewert says he expects they’ll make the same choice they have made the past three years—to stay on the road. “We’re both just really happy with what we’re doing,” he says. “We’re evangelical about this lifestyle because it offers so many new and exciting things.”

To read more, click here.

Baird: Wholesale RV Shipments Will Moderate

Editor’s Note: Robert W. Baird & Co. issued a client newsletter following Thursday’s release of the July wholesale RV shipment figures. Excerpts from the Baird newsletter follow.

Action

July shipments increase 53%. Motorhome shipments increased 125% and towable shipments grew 48%. Shipment growth has slowed recently, as expected, with the prime selling season coming to a close. Looking to the back half of 2010, we expect wholesale growth to moderate from levels seen in the first half, as dealers manage inventory, restocking rates flatten, and comps become tougher.

Summary

Total RV wholesale shipments up 53%. Shipments increased again, but have decelerated in late summer as dealers manage inventory levels ahead of the slower fall and winter seasons.

Motorhome shipments increased 125%. Class A shipments grew 150% while Class C shipments doubled. Easy comps and better restocking rates continue to drive strong wholesale growth in motorhomes, off historically low levels last year. Motorhome shipment are up 144% YTD.

Towable shipments grew 48%. Travel trailer shipments increased 48% and fifth wheel shipments also increased 48%. Towable shipment growth has slowed over the past few months but 2010 shipment levels remain significantly above 2009. Towable shipments are up 82% YTD.

SAAR. We calculate a seasonally adjusted annual rate of shipments. The SAAR of motorhome shipments fell to 25.6K units in July, from 26.6K units in June. The SAAR of towable shipments decreased to 201.8K units in July, from 241.6K units in June.

To subscribe to this and other Baird reports, contact Craig R. Kennison, CFA, at (414) 765-3870.

GE’s Lannon Addresses New Retail Program

The aggressive new finance program that GE Capital Commercial Distribution Finance has put together with Fleetwood RV Inc. is likely to cause quite a buzz as the industry turns toward the fall and RVIA’s 48th Annual National RV Trade Show, Nov. 30 to Dec. 2 in Louisville, Ky.

The new program, which involves all Fleetwood RV products invoiced on or after last Monday (Aug. 23), provides a competitive interest rate on financed inventory for 120 days and allows dealers to be reimbursed by Fleetwood for 100% of interest charges on new inventory financed through GE Capital and sold within 60 days. A second tier provides 50% interest reimbursement for inventory sold between 61 and 90 days.

Peter Lannon, managing director–RV, for GE Capital’s CDF Business, paused long enough earlier this week to answer a few questions about all of this during Fleetwood’s 2010 National Dealer Meeting in Fort Wayne, Ind.

RVBUSINESS.com: This is about as aggressive as it gets in the finance business these days, is it not?

It’s an innovative program. It’s aggressive, only because it combines two elements which have not been brought together before. There is the reduced interest rate for the first 120 days, which is kind of a standard offering. It’s been seen in the industry before.

But by combining it with the high-turnover option, which allows the dealers to recoup all of their interest expense if they sell through to retail in the first 60 days – or recoup 50% of it if they sell through in 90 days – that’s the unique feature, putting both of those together.

We’ve not done it before. It took somebody like Fleetwood to partner with us to see the value of it, and we’re very happy to innovate with Fleetwood to bring this to the market.

RVBUSINESS.com: It’s apparently based on the premise that fast turns benefit everyone, right?

It is. As we’ve said, we think one of the key lessons from the downturn is that there needs to be a renewed focus on turn at the dealer level – that the dealer has to get the product to the consumer and, frankly, hold margin for the dealers. It’s very important to keep fresh product at the floor, not to allow a lot of aged inventory to stack up, which then leads to discounting pressures.

So, with fast turn and rapid replenishment, which is probably a key thing that most manufacturers now are willing to talk about and encourage, that’s what makes it happen.

In the past, it was pretty much large orders at (the National RV Trade Show in Lousiville, Ky.), or maybe twice-a-year large orders were the norm because manufacturers wanted to level out their production. Now in the current environment, manufacturers see the value in taking more frequent orders, even though each order might be smaller, and responding with lean production.

Just like Fleetwood was talking about here at their dealer meeting, they can fill those orders much more quickly and be much more market-attuned and shorten down the inventory carry cycle for dealers, which is where dealers are probably at the most risk.

RVBUSINESS.com: The end result of all of this for GE is healthier clients, right?

Obviously, faster turn and the promotion of margin retention makes for healthier dealers, which reduces our risk and it also reduces risk for the manufacturers because they can develop stable, long-term dealer relationships without as much exposure to the market swings.

RVBUSINESS.com: Are you going to do this anywhere else? I mean, are we going to see any more aggressive programs out of GE?

At GE, what we are interested in seeing is improved turn overall from dealers, and we are open to working with other manufacturers that share that philosophy about promoting the turn from dealers to retail customers. So, yes, we are open to working with other manufacturers with programs that are designed to promote the turn.

RV ‘Characters’ Sought for New Reality Show

Pilgrim Films and Television Inc, the producers of “American Chopper” (TLC), “Dirty Jobs” (Discovery Channel), “The Ultimate Fighter” (Spike) and “Ghost Hunters” (Syfy), is seeking to cast a company of fun, outgoing and even outrageous RV customizers/converters to appear in their own, unscripted TV series on a major cable network.

The right company for this show custom builds extreme motorhomes, customizes existing RVs with extravagant accessories or converts buses into RVs, outfitting them with high-end electronics and top-of-the-line add-ons, according to a news release.

The goal is to put a unique, creative spin on the average recreational vehicle and help RV folks and fans out-style and out-drive each other on the road, in the park and at the rallies.

The release stated, “If you feel that your company has an exciting, colorful group of technicians, designers and experts who make RV magic every day and deserve to be seen on TV, then please e-mail producers at RoadWarriorCasting@gmail.com with the company name, location, phone number, e-mail address, company website and a brief reason why the company and crew would be perfect for a show like this.”

Feel free to send photos or a link to photos of custom work and crew.

Questions can be directed to Zig Gauthier at (818) 478-4540.

For more information about Pilgrim Films and Television and their shows, visit www.pilgrimfilms.tv.

Next Page »