The news from the Recreation Vehicle Industry Association (RVIA) that shipments for May were up nearly 12% over last May came as no surprise to Joe Wooldridge, sales manager at Indiana’s Great Lakes RV Center and Elkhart RV Center.
As reported by the South Bend Tribune, the company sells RVs not just to a local audience but a national one as well via the Internet. His company delivers them as far away as Canada and Alaska.
“There was a tremendous surge of travel trailers in the spring, which is a seasonal type of activity,” Wooldridge said. “May was a very, very good month for us.”
At Great Lakes RV Center and Elkhart RV Center, sales for the year are up over last year and are going very well, Wooldridge said. The same is true for the entire industry. Through the first five months this year, total RV shipments have now reached 144,015 units, up 13% compared with the same period last year.
Considering that each of the last three years has been up compared with the year prior, that’s saying something, especially in northern Indiana, where more than 83% of all RVs nationwide are made. Elkhart County alone employs more than 24,000 people connected with the industry.
What Wooldridge is seeing are a lot more customers who are opting for the lifestyle on more of a full-time basis, rather than just for vacations.
“There’s a lot more people taking extended times,” he said. “They have that ability to do that, of course. But they are spending three months, six months at a time (in their RVs).”
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Susan Dwyer and her husband, David, bought a travel trailer about a year ago and already are looking to upgrade.
According to report in the Indianapolis Star, the couple plunked down $11,000 for their current model, but with five kids still at home, they are looking for something roomier. Even a higher priced RV is less expensive than spending $250 to $300 a night between two hotel rooms for a family vacation, Dwyer said as she waited for her travel trailer to get some minor repairs at Camping World RV in Greenwood.
“We’re pretty financially set right now,” said Susan, a 52-year-old from Bargersville, “and we can travel with the trailer and not feel pinched.”
The Dwyers’ interest reflects an encouraging trend for the RV industry, particularly in Indiana. Sales, though shy of their 2006 peak, are rising as the economy improves.
Nationally, 13.3% more RVs were shipped during the first five months of this year than during the same months in 2012, according to the Recreation Vehicle Industry Association (RVIA). Sales have been rising since 2010. There are a record 9 million RV owners today.
In Indiana, where the unemployment rate stubbornly remains above 8%, the upswing is welcome news. More than 80% of all RVs are made in the Hoosier state, the industry association said.
“Employment is rising as manufacturers are hiring people,” industry association spokesman Kevin Broom said, “especially in Northern Indiana.”
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The boom in the recreational vehicle industry isn’t only helping the many manufacturers and suppliers in and around Indiana’s Elkhart County, it’s helping dealer Tiara RV on Elkhart’s north side.
“May and June are both really strong months. These last couple of weeks are the strongest we’ve seen since the FEMA stuff” in the wake of Hurricane Katrina, said Todd Cornell, the dealership’s owner.
According to a report by The Elkhart Truth, the recession slammed the RV industry, with people putting off discretionary purchases and lenders tightening up their purse strings.
Now that money’s becoming more readily available, Cornell and his staff are seeing more middle class folks getting back into the RV market.
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Crediting factors ranging from good weather to the improving economy, Oregon dealers are reporting increased sales of recreational vehicles.
Brandon Johnson, owner of Johnson RV in Sandy, said sales of motorhomes are up 20% so far in 2013, according to a report in the Portland Business Journal. That follows a 15% uptick in 2012.
“A recovering economy is definitely a factor when you’re selling luxury items,” Johnson said, adding that customers have greater confidence in their personal finances.
About 70% of Johnson’s business is in used motorhomes, which allowed the business to survive after the recession. Now, however, new vehicle sales are outpacing those of used inventory.
Prices for Johnson’s new vehicles range from $50,000 to more than $600,000, with the priciest models leading the way. Used vehicles range from $20,000 to $200,000.
As for towables, sales at Curtis Trailers in Portland and Beaverton are up about 14%, said owner Bob Schriever. His selection includes new and used trailers, fifth-wheels and campers for pick-up trucks. Prices range from $12,000 to $70,000.
“It’s like the floodgates have opened up,” Schriever said, adding that warm and dry weather have boosted sales.
Myrtle Beach, S.C.’s award-winning Ocean Lakes RV Center just completed major renovations, and has expanded its facility. It now includes an additional RV service bay, new RV sales offices, and more space for its camper supplies, parts and accessories store and Awning Center, according to a news release.
The RV Center sits beside Ocean Lakes Family Campground’s main office and is accessible from King’s Highway and from inside the campground.
“This renovation and expansion were crucial to meet the needs and demands of our customers,” explained Chris Allen, general manager of Ocean Lakes RV Center. “We experienced a record year in sales and service during 2012 signaling that the time was right to make this investment in our facility.”
Ocean Lakes RV Center has added a 60-foot by 22-foot camper service bay onto the back of its existing structure. With seven service technicians on the team, the new service bay gives the RV Center the capability of working on larger fifth-wheel campers and park trailers. The company reported that as RVs have grown in size, including height, the older bay made it difficult for technicians to service camper roofs and air-conditioning units. Plus the 1,320 square feet of additional space allow the technicians to work on four units at one time. Ocean Lakes RV Center also travels to other area campgrounds to service RVs at their campsites.
Adding new sales offices became necessary as well. With consumer confidence on the rise and interest rates lower, 2012 was a record year for RV sales at Ocean Lakes RV Center, which specializes in travel trailers and fifth-wheel campers. The RV Center added 425 square feet for two sales offices and a pre-sales lobby to provide more privacy while dealing with financial information. In addition to new campers, Ocean Lakes RV Center also sells used campers and those on consignment. Camper inventory prices range from $7,500 – $90,000 making it appealing for many families and retirees.
The expansion allowed Ocean Lakes RV Center to also increase the square footage of its store, which carries a wide range of camping supplies and accessories. With more floor space, it is now able to stock additional accessory lines. In addition, the Ocean Lakes RV Center increased storage space to accommodate more service and store merchandise for future need.
For more information about Ocean Lakes RV Center, visit www.olrv.com, or call (800) 226-7716 or (843) 238-5532.
Many boomers may have doubts about their nest eggs, but at least one symbol of retirement prosperity is rolling along quite nicely.
According to a MarketWatch report, the Recreation Vehicle Industry Association (RVIA) says that it expects sales of RVs and motorhomes to reach 307,000 units in 2013, which would make this the industry’s best year since 2007.
The RV business all but collapsed during the last recession, thanks to the combination of economic upheaval and high gas prices, with sales falling 58% from 2006 to 2009. Shriveling credit markets played a role, too, with many lenders being unwilling to finance RV and motorhome purchases even as they freed up money for car loans in general. Indeed, some analysts say looser lending policies are a major factor behind the current rebound.
A spokesman for Thor Industries Inc., the company that makes Airstream and other popular RV brands, tells Kyle Stock of Bloomberg BusinessWeek that buyers can now “get financing pretty easily up to about $150,000.”
RV salespeople say that retiring “snowbird” boomers are their biggest customer group; the trade group doesn’t publish specific age breakdowns, but its literature suggests that ownership rates are highest among those between age 55 and 75.
Speaking of snowbird stereotypes, the archetypal motorhome, in which the driver’s cabin and the living quarters are all on the same chassis accounts for only about 12% of RV sales.
“Travel trailers” that get towed behind another vehicle make up the majority of the market. Some of those are quite modest, but price tags on the most luxurious models can top $90,000.
Recreational vehicles have evolved to offer more luxuries of home — from second bedrooms with bunks to full-scale, outdoor kitchens built into the side of the trailer.
The Press of Atlantic City reported that as the RV industry continues its rebound from its recession drop, residential amenities are becoming major drivers in the market, according to New Jersey dealers. Outdoor kitchens can include two-burner stoves, refrigerators, television sets, hot-and-cold running-water sinks and grills — all concealed until an outside compartment is flipped open.
“The latest big thing for the towable is an outside kitchen,” said Rick Whitney, the sales manager at White Horse RV Center, with locations in Galloway and Williamstown. “It wasn’t available three years ago at the most. Now they have full outside kitchens and entertainment centers.”
More of today’s RVs include features and options unconsidered decades ago — porcelain toilets instead of plastic, sleek frameless windows, solid wood cabinets and second bedrooms, lending them a more residential feel.
“Kids aren’t sleeping on the couch anymore,” Whitney said.
RVs with such amenities are becoming a large segment of the market — a shift from previous generations that started with entry-level units and gradually upgraded over the years, said John Worthington, marketing director for Driftwood RV Center in Dennis and Egg Harbor townships.
“It’s coming to be the biggest section. There are a lot of younger families getting into RVs. And it used to be you’d start, get a pop-up, then a bigger trailer. Now more families want the four bunks, the outdoor kitchen, they want everything in it,” he said. “It’s growing and it’s now pretty much the majority.”
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Thor Industries Inc. today (June 6) reported a 6% increase in earnings for its fiscal third quarter, ended April 30, on a 13% increase in sales.
Revenue for the third quarter totaled $1.05 billion compared to $926.5 million in the third quarter last year, based on strength in RV sales. Net income for the third quarter was $43.8 million, or 82 cents per diluted share, up 6% from $41.3 million, or 78 cents per diluted share, in the prior-year third quarter.
Sales for the nine months totaled $2.67 billion, up 22% from $2.2 billion in the prior-year period. Net income for the nine months was $94.6 million, or $1.78 per share, up 22% compared to $77.4 million, or $1.43 per share, in the first nine months of fiscal 2012.
“We are pleased with the continued growth in revenues and earnings we were able to achieve in the third quarter, as a number of the actions we’ve taken to improve our operations began to gain traction,” said Bob Martin, Thor president and COO. “While our markets remain competitive, we are now in the middle of the peak selling season for the RV industry, when demand improves and discounting tends to stabilize, leaving us in a strong position to finish out the year.”
Highlights of Thor’s third quarter include:
• Total RV sales were $929.8 million, up 15% from $807.2 million in the third quarter last year.
• Towable RV sales were $742.5 million, up 9% from $680.5 million in the prior-year period.
• Motorized RV sales were $187.3 million, up 48% from $126.7 million in the prior-year third quarter.
• Bus segment sales were $119.4 million, up slightly from $119.3 million in the third quarter last year.
“Thor generated strong gains in both revenues and net income during the third quarter, based on continuing strength in our RV business and stability in our bus business,” said Peter B. Orthwein, Thor chairman and CEO. “Our results for the third quarter reflect the dealer optimism and improved retail consumer demand that has been building since the beginning of the year, which is now entering peak seasonal demand for our RV products. Based on the current positive momentum we see in our markets, we are confident in our ability to generate growth in sales and earnings for the remainder of the year.”
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The recent acceleration in car sales is impressive, but there’s an even better sign the U.S. economy is getting back on track: surging sales of recreational vehicles. Bloomberg Business Week reported that makers of RVs shipped 32,054 machines in the U.S. in April, a 19% increase from a year earlier, according to data compiled by the Recreational Vehicle Industry Association (RVIA).
RVs are a notable niche because it takes no small amount of consumer confidence to buy a gas-guzzling home on wheels. Between 2007 and 2009, more than half of the RV market disappeared. Light-vehicle sales, by contrast, dropped by 36%. “No one needs an RV,” said Jeff Tryka, a spokesman for Thor Industries Inc., one of the biggest U.S. RV makers. “It’s a purely discretionary purchase, while there’s always going to be a base-level demand for cars.”
The motorhome and towable RV business, a $14 billion market in the U.S., is on track for its best performance since 2007. For the year to date, shipments are up 13% and RVIA expects more than 307,000 vehicles to roll by January. The sales boost doesn’t matter much to Detroit, but it’s big news about 200 miles away in Indiana, where roughly half of the country’s RVs are made. It’s also great for companies like privately held Jayco Inc., the Forest River Inc. unit of Warren Buffett’s Berkshire Hathaway, and Thor, which cranks out some of the most popular RV brands.
When the RV market bottomed out in 2009, Thor’s payroll dropped to 5,400 workers; today it employs 8,800. And in anticipation of higher demand, it just bought a factory in Wakarusa, Ind., equipped with 35 booths for painting giant campers. The company will give a progress report when it announces earnings later today. Last quarter, Thor posted income of $19.9 million—a 45% increase from a year earlier.
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Ron Spike purchased a Rockwood Windjammer travel trailer at Ruff’s RV Center in Euclid, Ohio, two months ago.
According to a report by the Cleveland Plain Dealer, in the months since he joined the 8.9 million U.S. households — or 8.5% of all American households that now own RVs — Spike is part of a growing community of people who see upscale camping or traveling as a great way to relax.
“I parked mine at a campground in Geneva. Even though it’s about 40 minutes from our home in Lyndhurst, it’s still like going on vacation,” said the 62-year-old recently retired truck driver whose wife Marlene will join the retirement ranks this month. “There’s no stress out there. It’s so relaxing.”
Across town, Ron Revelt of Olmsted Township stopped by Moore’s RV in North Ridgeville to pick up a part for his decked-out fifth-wheel, his third and last purchase made in 2008. But he couldn’t help but check out an even more luxurious recreational vehicle during his visit.
“They keep coming up with more new neat things,” said Revelt, 73, a retired teacher and pilot who talked of new safety features and luxuries in the kitchen and bedrooms. “There’s always something I want.”
Nationwide, sales are rebounding because of new destination campers like Spike and repeat customers like Revelt who travel the country. They represent renewed hope for an industry that has suffered blows since the recession but is now attracting more younger people and families.
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