Variety of Firms Showcased Product in Louisville

When there are just 12 people building trailers in your RV company, ownership is a hands-on activity.

The Goshen (Ind.) News reported that as the large sales staffs of recreational vehicle giants gathered nearby this week to plot their sales strategies for the 49th Annual National RV Trade Show at the Kentucky Exposition Center (KEC) in Louisville, Jason Howard was decked out in blue jeans and a T-shirt and was working hard to rub away the road grime from the front of a new Echo Bandit toyhauler trailer.

“Some of my former colleagues came by and said, ‘gee, we hardly recognized you,” Howard said with a laugh about his work outfit.

Howard and his business partner Mike Scheetz created Echo RV, based in Elkhart, 14 months ago. Since then they have expanded their offerings to three models, the Bandit, the North Bay trailer and the entry-level American Spirit trailer.

This week at the trade show they were seeking out new dealers and working to make sales to their existing dealers, a process that is ongoing year-round but comes to a peak at the end of each year as new RV models are introduced.

“This whole gig cost us $20,000,” Howard said of the outlay needed to display the company’s three products at the show in an effort to expand business.

But cash flows both ways, Howard said in reference to competing with larger companies.

“That’s where it benefits us,” he explained. “As a privately-held company, we don’t have stockholders expecting to get paid on each coach. We can keep our overhead low.”

Howard’s company was competing for dealer dollars against much larger companies at the Louisville Show, including Heartland Recreational Vehicles LLC, also of Elkhart.

The Goshen News reported that Joel Richardson of Elkhart had a table full of boxes in front of him at the Heartland display. Normally Richardson sells RVs. Monday (Nov. 28) afternoon he was busy sorting through stacks of “point-of-sale signs.”

“They list the features that make us stand out,” Richards said.

The Heartland display area was outlined with blue flashing L.E.D. strip lights along the carpet of the perimeter. Like many of the larger sales areas, there was a reception counter stacked with plenty of brochures and sales fliers. The company had 39 units on display.

Nearby in Hall 5, Bob Dunn, general manager of Coachmen’s Apex line of lightweight trailers, was showing the company’s line of lightweight towables.

The Apex line has been expanded, literally. The company now offers the trailer in an 8-foot wide unit, 6 inches wider than the 7-1/2 foot units.

Dunn said the lightweight Apex line is meeting the growing consumer trend of downsizing to lighter-weight trailers. He said that trend is being driven by drivers using more “crossover” type vehicles with limited towing capacity.

In addition to the 67 manufacturers, 250 supporting suppliers showed product in Louisville, including John Regan of Middlebury. He owns a fabric mill in North Carolina that supplies material to his former company, Fabric Services in Bristol.

Regan is on the board of the Recreation Vehicle Industry Association (RVIA), which sponsors the show. He started Fabric Services in 1988 and has been to every show since. A few years ago he sold the company to the employees and moved on to ownership of Abercrombie Textiles.

 

“We are big fans of what the industry does,” he said.

 

 

Coon: Industry Enjoys Favorable Demographics

In a presentation titled “What’s Up!” at Outlook 2012: Up & Away, held Nov. 29 at the National RV Trade Show in Louisville, Ky., RVIA President Richard Coon said that new findings from the just-released “RV Consumer Demographic Profile” provide encouraging news about the health and long-term viability of the RV industry.

“RV ownership is at its highest peak ever with 8.9 million U.S. households now owning an RV,” said Coon. “This number has been on the rise since 1993, and the growth reflects the enduring appeal of RV ownership despite economic challenges.”

Coon reported that ownership has surged among adults age 35- to 54-years-old with 4.3 million households owning an RV in this key age group, up from 3.5 million in 2001 and 3.9 million in 2005. “This is a very strong finding and is an indication of the success of the Go RVing effort to attract younger buyers to the market.”

RV ownership in the 55-plus age group has also grown, rising from 2.5 million in 2001 to 3.6 million in the most recent study.

In addition to showing steady growth in RV ownership, Coon said the “RV Consumer Demographic Profile” also offers promising data regarding future RV purchase intentions. When purchase intentions are combined across current owners, former owners and new market entrants, a total of 21% of U.S. households stated intentions to purchase an RV at some point in the future. This represents only a slight decline form the 23% rate in 2005, and is ahead of the 16% rate in 2001.

“These intentions won’t be realized overnight, but they clearly show continued strong demand for RVs in the years ahead,” Coon explained. “The 2011 data was collected in a challenging economic environment but track closely with the findings from 2005 when the economy was performing better.”

Coon also shared RVIA’s forecast for RV wholesale shipments through 2012. Based on current market conditions, RVIA expects shipments to end 2011 at 247,100 units, a 2% over the 242,300 units shipped in 2010. In 2012, shipments are predicted to drop slightly to 240,600 units.

 

 

 

“The shipment number forecast for 2012 would essentially keep totals at the same level for the past three years,” said Coon. “In this uncertain, volatile economy, having steady, stable shipments isn’t all bad. If fact, it’s a good place to be when you also consider the long-term prospects for the RV market found in the new demographic research.”

RVIA Convening 2012 Annual Meeting March 4-7

The Recreation Vehicle Industry Association’s (RVIA) 2012 Annual Meeting will take place March 4-7 at Rancho Las Palmas Resort and Spa in Palm Springs, Calif.

According to a press release, Annual Meeting attendees will have numerous opportunities to learn about the association, attend educational seminars and interact with business colleagues.

The RVIA Executive Committee and board will convene on March 5 and the following day RVIA will present a series of in-depth seminars and speakers focusing on topics impacting the RV industry.

RVIA will host its Annual Membership Meeting on March 7. This program will provide reports on association activities from key officials including RVIA Chairman Gregg Fore and RVIA President Richard Coon. The event concludes with the Chairman’s Reception and Dinner that evening.

Recently renovated, Rancho Las Palmas is a conference resort nestled in the heart of Rancho Mirage, at the base of the San Jacinto Mountain Range in the Coachella Valley. It offers state-of-the-art meeting facilities stretched across 41,000 square feet of conference space.

For more information, contact RVIA’s meetings department at (703) 620-6003, ext. 305.

Startup Campsmart.com Strives to Link Markets

A fledgling Elkhart, Ind., company is creating a free website — campsmart.com — with the goal of connecting campgrounds, consumers, RV manufacturers, dealers and suppliers.

‘There is a disconnect that exists between dealers and campgrounds and manufacturers and campgrounds,” said Mark Lucas, president of Campsmart LLC. ”They all are good at what they do, but nobody has been making a non-brand specific effort to bring everything together.

”With an industry that is fragmented, I thought all of us working together can do greater things, particularly when you bring in the retail owner.”

Campsmart.com intends to act as a hub where the different RV communities can interact with each other, incorporating ”the best aspects of FaceBook, LinkedIn, Angie’s List and others solely focused on one fragmented industry,” Lucas said.

”I believe the individual aspirations of each segment can be harnessed to passively weave the fiber to connect all these inwardly focused organizations,” he said.

As campgrounds join campsmart.com, the site will offer a nationwide reservation system, which Lucas said does not exist today.

The website initially will be supported by advertising while eventually, Lucas said he hopes to create a database of recreational vehicle VIN numbers registered by consumers that will allow manufacturers, for a fee, to more efficiently conduct recalls.

”In my mind, there are big things on the horizon when we get the buy-in from industry members and consumers,” Lucas said. ”Right now, we are looking for people to give us feedback about what we can do with the site and for them to understand that it’s a work in progress.”

Lucas is the former president of manufacturer CrossRoads RV, Topeka, Ind., and helped launch Gulf Stream Coach Inc.’s Yellowstone RV subsidiary. He and Brad Yoder, a camper and avid fisherman, along with Mark Smith, the former head of IT for Gulf Stream who is now an RV industry consultant, are partnering to operated the website.

With invitations sent to 250 industry members, more than 100 already have joined campsmart.com, Lucas reported.

”I want to get the foundation there so that when the retail consumers show up they can have the interaction that they need,” Lucas said.

campsmart.com will have a presence at the 49th Annual National RV Trade Show Nov. 29-Dec. 1 in Louisville, Ky., and plans are to begin marketing the website to consumers in December with ads in retail consumer magazines and websites.

Hoosier Business Climate Earns Top 10 Rating

A prominent national publication has ranked Indiana’s business climate in the top 10 for the fourth consecutive year. The Hoosier state is home to the recreational vehicle industry’s manufacturing hub in Elkhart County.

As reported by Inside Indiana Business, Site Selection said the annual list is based on economic data including tax policy and business expansion as well as a survey of business executives.

The publication’s top ten business climates for 2011 are below:

1. Texas

2. Georgia

3. North Carolina

4. Virginia

5. South Carolina

6. Indiana

7. Louisiana

8. Tennessee

9. Ohio

10. Florida

Site Selection ranked Indiana in the top 10 in all categories used to compile the list. Last year, Indiana was ranked eighth, up one spot from 2009.

 

 

Americans Deal With New Normal in Gas Costs

The new normal for gasoline prices continues to plague American consumers, according to a report by the Los Angeles Times.

Over the last week, the average price of a gallon of regular gasoline in the U.S. stabilized, down 1.4 cents to $3.462 a gallon after jumping nearly 6 cents a gallon the previous week, according to the Energy Department’s weekly survey of service stations.

But that’s 22.6% higher than the old record for this week of the year, which was an average of $2.823 a gallon set in 2007. For the same week in 2010, the U.S. average was $2.817.

Analysts say that world demand for refined fuels is keeping U.S. gasoline prices high, in part because the U.S. is exporting record amounts of fuel. In addition, U.S. refineries also are processing more diesel, at the expense of gasoline production, to meet that global demand.

U.S. drivers are poised to shatter the old record for gasoline spending of $449 billion in 2008 by shelling out an estimated $491 billion this year.

“It’s like we just can’t ever get a break,” said Phil Flynn, an analyst for PFGBest Research. “This has really been a bad year for fuel prices.”

There has been some hope that the end of hostilities in Libya might quickly bring down world oil prices, “but I just don’t see it happening,” said Patrick DeHaan, senior petroleum analyst for GasBuddy.com, a website that tracks the prices of fuel.

Oil got a boost from signs of economic growth in the U.S. and Asia and from hopes that a solution to the European debt crisis was near.

 

Report: Indiana Business Owners Still Cautious

The latest Indiana Business Confidence Index (BCI) indicates the Indiana business community continue to have concerns about the economic climate. The BCI has fallen from a high of 67% in February to 60% this month.

The BCI is a measure of the overall confidence Indiana business leaders and employees have in their company’s opportunity for growth and success in the coming 12 months. Indiana is home to the recreational vehicle industry’s manufacturing hub in Elkhart County.

“Even though 60% of respondents are still confident in their business, the Business Confidence Index as a whole has significantly declined in the last eight months,” said Gerry Dick, president of Grow INdiana Media Ventures LLC and host of Inside INdiana Business with Gerry Dick. “Indiana executives seem to believe that the economy will not turn around quickly, however they do feel that Indiana is poised for a resurgence once the economy improves, especially compared to other states.”

The INdiana Business Council’s latest study also measured how Hoosiers businesses feel about their customers. Nearly 1,400 members of the statewide, online panel responded to the survey and the results include:

• Nine out of 10 Hoosiers feel their company is customer-focused, and more than 70% say they use customer input for strategic direction.

• Seventy-one percent believe they incorporate customer insights in their strategic planning, and almost two-thirds say they seek input from customers to manage and improve business.

• While price alone can be a factor for customers to switch to a competitor, the study indicates when customers have a high level of satisfaction price becomes less of an issue.

The INdiana Business Council is an online panel of approximately 4,500 Indiana business professionals that are surveyed on important business and economic issues throughout the year. Feedback from the panel is analyzed, interpreted and published by Walker and Inside INdiana Business. The INdiana Business Council is a partnership between Inside INdiana Business and Indianapolis-based Walker.

 

Baird: Dealers Conservative Heading Into Winter

Robert W. Baird & Co. issued a client newsletter to investors following the towable sales report for August by Statistical Surveys Inc. The following offers a summary of the results.

U.S. towable retail up modestly. Dealer towable sales increased 3% in August, according to Statistical Surveys (data is frequently revised upward), generally in line with results from our recent dealer survey. Results improved sequentially, but growth has been slow on weak consumer confidence and an uncertain economy. While retail remains weak, lean dealer inventories and incentives at recent manufacturer open houses could support orders heading into winter.

Towable demand up 3%. U.S. towable sales improved 3% in August, and are up 7% YTD. Travel trailer registrations improved 4% (+8% YTD), offsetting fifth wheel sales down 2% (+3% YTD). Keep in mind, data is frequently revised upward.

Inventory. Dealers restocked units throughout the winter and spring as shipments exceeded retail sales, but dealers in our recent survey confirmed inventory is still relatively lean. We expect dealers to remain conservative heading into winter, but do not expect destocking, despite weaker retail.

Retail U.S. SAAR. We calculate a seasonally adjusted rate of retail registrations. The SAAR of U.S. towable demand (including fifth-wheels and travel trailers) increased to 168K units in August, from 157K units in July. Just over 150K units were sold in the U.S. in 2010.

Important note. The data excludes or is incomplete with respect to Minnesota and Maine. We caution against attaching undue significance to data from a single month. The data tend to fluctuate from month to month, and are frequently revised upward.

This summary of a Baird research report is not intended as investment advice. To participate in Baird surveys and receive research reports, contact Craig R. Kennison, CFA, at ckennison@rwbaird.com.

Dealers Flocking to Elkhart County Open House

RV dealers are flocking to northern Indiana this week to view new 2012 models as Elkhart County’s 4th Annual RV Open House Week kicked off Monday (Sept. 19), according to a report by WNDU TV, South Bend.

Some 3,500 RV dealers representing 1,600 dealerships are expected to pass through by the week’s end.

“This is a really big deal,” said Ed Kinney, vice president of sales and marketing for Millersburg-based Carriage Inc. ”It developed into a big deal with dealers coming in to look at product, buy product, take it back to their lots and get ready for the fall season.”

In a field just east of the RV Hall of Fame, about 500 units are on display for Thor Industries Inc. companies. Meantime, Carriage RV and several other companies set up on the south side of town, near the U.S. 20 Bypass and County Road 17.

“We’ve got several new floorplans in the Carriage line,” said Kinney. “We’ve got a new Cameo here that’s got a resort shower in it, which is like a 48-inch by 32-inch shower, which is new.”

At the Monaco RV LLC display, representatives were showing brand new Vesta Class A motorhome. “The Vesta is the only coach that was really designed with a wind tunnel,” said Tim Jones of Monaco.

While the Vesta is big and brawny like most motorhomes, it is also sleek and aerodynamic. “We’re hearing people driving these coaches around that are getting 9 1/2 to 10 1/2 ten miles per gallon in a 36-foot to 40-foot motorhome,” said Jones.

At last year’s open house, factory shipments to dealers were running about 70% higher compared to the year before. This year, the increase is a much more modest 6%.

“It’s still a steady year, it’s a good year for who are still in business and survived and doing OK,” said Kinney.

Kinney and others hope that making better products will make up for the bad economy. “I think we’re cautiously optimistic but we also know there’s a lot of uncertainty out there.”

Kenny Gipson is an RV dealer in Mountain Town, Ark., who made the trip to Elkhart. “You have to be optimistic or get out of the business. They’re trying to make the product better suited for what people want.”

By the end of 2011, the industry is expected to deliver about 247,000 units to dealers which would be an increase of about 2% over 2010 figures. However, experts are predicting that dealer shipments will decline in 2012 by about 2%.

 

 

Elkhart County Attracts Investors, Jobs to Area

Editor’s Note: The following is an article authored by Gene Stowe appearing in Tribune Business Weekly, a publication produced by the South Bend (Ind.) Tribune, outlining Elkhart County’s successful drive to generate significant investment in the local business community.

Speaking by telephone from a pub in Germany, Nicholas Gwynne muses that not so long ago, his first reaction to a mention of Elkhart, Ind., might have been: “Where the hell is Elkhart?”

Now Gwynne, vice president of operations for Kiel N.A. LLC, urges others across Europe to consider northern Indiana for business relocation. The international seat-manufacturing firm is investing $3.79 million in an Elkhart operation.

“Northern Indiana has some fascinating opportunities,” says Gwynne, who heard of the area through some associates in Italy and Canada. “It’s got a vast pool of potential employees that are pretty well trained. It has a vast pool of second-tier suppliers, which is what we want to use.

“The cost of shipping, the cost of the infrastructure, the interstate — it’s fantastic. You can go east, west, north, south without a problem. You’ve got three international airports within a three-hour drive. What more do you want? You’ve got the Port of Indiana. It’s amazing.”

The amenities are attracting more and more investment to Elkhart County, identified just three years ago as the “white-hot center of the economic meltdown” and visited by Barack Obama as both candidate and president.

In the next two years, new and expansion projects brought $345 million in investment and nearly 6,500 jobs to the county, with more coming this year.

Last month, the Economic Development Corporation (EDC) of Elkhart County at its annual Investors Lunch honored six companies that made significant contributions to the 2010 success:

• Abrasive Blasting and Coating Services, which invested $167,600. Chris Wert from administration and Joe Grandstaff, operations manager, represented the company, which provides corrosion control services for parts used in power generation.

• Livin’ Lite RV, which invested $757,000. President Scott Tuttle represented the company, which manufactures ultra-lightweight automotive campers and aluminum trailers and markets them in North America, Europe and Australia.

• MSC Industrial Supply, which invested $8.06 million. Rick Spriggs, senior director of Midwest customer fulfillment, represented the company which is one of the nation’s largest direct marketers of industrial supplies and equipment.

• Nexus RV, which invested $1 million. President Claude Donati and Vice President David Middleton represented the company, which builds and sells motor homes at the same site.

• Santelli Tempered Glass, which invested $3.8 million. President Joe Santelli represented the company, which makes tempered glass and serves the RV market among others.

• Vixen Composites, which invested $7 million. President Gregg Fore represented the company, which manufactures structural and exterior composite panels for the RV industry.

Those were part of $100 million in investment last year that created 1,765 jobs. In 2009, $245 million in investment created 4,700 jobs.

Earlier this year, six manufacturers and a large distributor have announced plans for $22 million in investment that will add at least 350 jobs, including Kiel N.A.

Gwynne says the company will eventually employ 150 people and keep another 150 busy in local vendors.

“We’re going to be using services,” he says. “I found them in Nappanee. I found them in Goshen. I found them in South Bend. I found them in Elkhart itself. The whole area has very supporting opportunities for us.”

Gwynne says small-town opportunities in the United States are usually undersold, but Dave Ogle, director of business retention and expansion for the Economic Development Corporation of Elkhart County, enlightened him about the possibilities.

“One thinks of the United States as a big country, but the backbone of your country is what politics has forgotten,” Gwynne says. “I was impressed with the volume of small and middle-sized companies. I talk about it here in Europe.

“Northern Indiana has fantastic opportunities to the east, to the west, to the south and to the north. America has got an opportunity because you’ve still got an industry that can provide you with fantastic product, and it should be utilized.”

 

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