Top

‘Beware the Oil Manipulation Gang of 2011’

January 12, 2011 by · 1 Comment 

Tom Walworth

Tom Walworth

It is interesting that once again the oil traders are looking for a run up in oil prices, Statistical Surveys Inc. General Manager Tom Walworth tells RVBUSINESS.com and RVBusiness magazine, for which the Grand Rapids, Mich,-based executive generates periodic policy statements.

We are currently looking at a very similar pace as we had in late 2007 and all of 2008. If you remember the stories in 2008, the world was running out of oil. The developing nations were using supply that they had not used in the past and this, we were told, justified the run up in fuel prices.

Yet, if you take a look at the accompanying graph, we started December of 2007 at a national average price of $3.11 per gallon. In January we went to $3.15 per gallon and by July we were at $4.16. Curiously, in December of 2010 the price for a gallon of gas was $3.11 per gallon. The January 2011 price was $3.14 per gallon.

Does this look familiar?

Let’s look at the rest of the story: By December of 2008 gas was at $1.67 a gallon. This was a 59% decline in gas prices from the high in July of 2008. How could this be when, only months earlier, we were running out of oil? The lack of supply and demand came into play with the price of spot crude at $145.31 a barrel. Every oil producer was pumping as much as they could, and the search for more crude was hot. The end result was the world found more crude, prices dropped and there was a glut of oil.

The search resulted in more oil off the coast of Brazil and Africa. Remember the big find that the United States had in North Dakota, in the Gulf of Mexico and in the Canadian oil sands of Alberta? These did not go away. They continued to produce oil as did other producers. Bottom line, the earth continued to produce ‘Black Gold.’

The fact of the matter is that we have enough oil to take us into the late 2000’s, and after that we have a large supply of natural gas to which conventional engines can be converted if and when that day arrives.

No, it seems as if this run up in fuel costs is due to the ‘anticipation of a shortage,’ not to any real long term shortage. The manipulation of our fuel prices benefit a small group in the short term and will hurt our economy with rising unemployment – this, in an already weak economy.

You need to be concerned with the rising fuel prices. But history shows that this price spike – however severe it may get — should not be long term. Our suggestion: Don’t let the threatened fuel price increase take you out of the market for any fuel-burning product.

Tom Walworth

Statistical Surveys Inc.

FuelChart

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Walworth: Industry Retail Inventories in Line

December 8, 2010 by · Leave a Comment 

Tom Walworth

Tom Walworth

The atmosphere at the 48th Annual National RV Trade Show in Louisville, Ky., was clearly more upbeat than 2009’s convention and reflected an industry that is obviously mending from the most dire effects of the recent downturn.

But veteran industry statistician Tom Walworth noticed a fairly rampant theme at last week’s (Nov. 29-Dec. 2) Louisville Show that he’d like to address regarding U.S. RV shipments and dealer inventories because, Walworth maintains, there are some false assumptions out there that could skew forecasts and obscure the fact that the industry’s rebound is continuing in a serious way.

The bottom line, according to Walworth, is that dealer inventories – contrary to some perceptions – are in line as the industry heads into the final phase of 2010.

“The Recreation Vehicle Industry Association (RVIA) has forecast that we will ship 235,000 units in 2010, and SSI anticipates that 180,00 of them will be sold (at retail),” Walworth, general manager of Grand Rapids, Mich.-based Statistical Surveys Inc. (SSI), told RVBUSINESS.com. “If you do the math, that would put us at a 55,000-unit gain in inventory. But what isn’t generally known in the RV industry is that the RVIA number also contains shipments to Canada.”

Those Canadian shipments, says Walworth, comprise approximately 20% of all annual shipments by RV manufacturers.

“If you take 80% of the forecast shipment number — 235,000 — we’re talking about 188,000 units shipped to the U.S.,” he said. “Since SSI expects to track 180,000 units at retail next year state-side, we actually are looking at just an 8,000-unit gain in inventory — not the 50,000-unit gain the raw numbers might suggest.

“The floor planners may want to hear this,” he added. “This would reassure the industry that inventory is not exploding on dealers’ lots.”

Walworth acknowledged that the shipments would be dispersed among fewer dealers in 2010 due to retail closings attributed to the recession, but this should present no long-term problems. “Fewer dealers would mean that there are more units on the remaining lots,” he said. “But this is manageable.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

RVDA Con/Expo Comes at Industry Juncture

August 30, 2010 by · Leave a Comment 

Expo LogoThe 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.RVDA logo

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.

Mike Molino

Mike Molino

“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

RVDA of CanadaThe 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.”

Peter Albano

Peter Albano

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.

Dirk Kempthorne

Dirk Kempthorne

“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

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/ExpoGo RVing logo

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.

Gary LaBella

Gary LaBella

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.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

SSI’s Walworth to Address Michigan Association

March 10, 2010 by · Leave a Comment 

Tom Walworth

Tom Walworth

Tom Walworth, president of Grand Rapids, Mich.-based Statistical Surveys Inc., is one of the featured speakers at the April 14 Spring Education Program sponsored by the Michigan Association of Recreation Vehicles and Campgrounds (MARVC). The program will be held in the MARVAC Conference Center in Okemos, Mich.

Walworth will lead off the morning program and review the activity of RV sales around Michigan, looking at price points, sizes, gas vs. diesel and more. He will look at trends and share his experienced view of the 2010 RV selling season. Campground owners will be interested in what RV owners will be pulling into Michigan campgrounds this season.

The other session will be led by Traci Smith, Michigan program director for the USDA Rural Development Commercial Loan Guarantee Program. Smith will outline the program which provides loans at variable or fixed rates for real estate, equipment purchases and working capital. Eligible businesses must be located in rural communities less than 50,000 population. Smith will walk through the program answering questions regarding amounts, lending institutions and loan use purposes.

For more information on the USDA program, go to http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do.

For more information about the MARVAC event, contact Event Manager Debra Behrendt at (800) 422-6478 ext. 20.

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Walworth Seeing Cup Half Full in MH Retail Stats

October 19, 2009 by · Leave a Comment 

U.S. motorhome retail sales in August totaled 1,566 units, a 22.8% decline from the 2,029 units retailed in August of 2008, according to Statistical Surveys Inc.
 
Year-to-date retails through August reached 13,659 units vs. 22,898 units for the first eight months of ’08, an appreciable dip of 40.3%.
 
As significant as that decline may seem, Stat Surveys President Tom Walworth tends to see the cup half full for the motorhome market.
 
“This is the best monthly number that the industry has seen in 2009 based on the two-year percent-of-change,” reports Walworth.
 
Retail Class A motorhome sales were off 22.4 % for the month, while Class C motorhomes were down 23.4%.
 
Walworth noted that half of the top 10 motorhome manufacturers gained market share in August year-to-date numbers. “These manufacturers were taking advantage of the low dealer inventory by replenishing the void in inventory which helped meet the retail demand,” said Walworth, whose firm is based in Grand Rapids, Mich.
[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Walworth Sees Trouble Ahead in Stocking Disparity

September 3, 2009 by · Leave a Comment 

The RV market has good news and potential future problems, according to Tom Walworth of Statistical Surveys Inc., Grand Rapids, Mich.

Walworth, whose company tracks retail sales of motorized and towable RVs nationwide, noted that between January and June motorized dealers sold 5,651 more units than they wholesale ordered and on the towable side 8,854 more units were sold than wholesale shipped for a total reduction in inventory of 13,505 units.

During the same period last year motorized and towable inventories increased by more than 22,000 units as compared to retail sales.

“This year is very unusual,” Walworth told RVBUSINESS.COM, “primarily because spring is when dealers stock their lots in anticipation of moving them during the prime selling season.  This year we did not see the traditional build of inventory which has caused the inventory decline. RV retail sales declined but the wholesale market decline was greater than the retail.”

The potential future problem is that, due to the change in floorplanning policy, he said, the dealer may not stock in the fall to meet spring retail demand.  The dealers may choose to stock later in the year or early next year.

“The delay in inventory replacement will cause the manufacturers and suppliers to shorten their build cycle to meet demand,” he said. “This could cause shortages by suppliers to manufacturers and manufacturers to dealers.”

A solution would be for the dealers, manufacturers and lenders to come up with a plan to address this looming supply problem.

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

KOA’s Rogers Joins Panel at RVDA Convention/Expo

August 31, 2009 by · Leave a Comment 

 

Jim Rogers

Jim Rogers

Jim Rogers, chairman and CEO of Kampgrounds of America Inc. (KOA), will join an industry panel discussion examining the current economic factors affecting the RV industry during the RV Dealers International Convention/Expo at the Rio All-Suite Hotel & Casino.

The panel, titled “RV Market: Rebound in Sight,” will be led by RV industry’s retail scorekeeper Tom Walworth of Statistical Surveys Inc., Grand Rapids, Mich., on Wednesday, Oct. 7 at 2:30 p.m., according to a release from the Recreation Vehicle Dealers Association (RVDA).

Rogers currently focuses on strategic partnerships and corporate growth for KOA.  KOA offers more than 55,000 RV, tent, and Kamping Kabin sites at more than 450 U.S. and Canadian campgrounds.

In addition to Rogers, the panel of industry experts includes Mark Beecher, senior vice president of sales and marketing for Bank of the West, and Derald Bontrager, president  and COO of Jayco Inc., Middlebury, Ind.  The group will focus on the mindset of today’s RV traveler and what products they will buy, how these trends will impact the market, and how dealers can better position their dealerships for success. 

“We are fortunate to have these knowledgeable people in the RV industry join us for what will be an interesting and informative session as we prepare for the recovery that we know is coming,” said RVDA Education Foundation Chairman Rick Horsey.

This is just one of the workshops planned for the RV Dealers International Convention/Expo featuring the RV Learning Center, which will be held Oct. 6-9.  For special advance registration savings, register by Sept. 4.   For more information and to register, visit the convention section of www.rvda.org and follow the RV Learning Center and convention on Facebook and Linkedin.

Meanwhile, advance registration for the event is exceeding expectations.

With the deadline on Friday to take advantage of  discounts, RVDA has 280 people from 163 U.S. dealerships and 59 people from 34 Canadian dealerships registered, according to Phil Ingrassia, RVDA vice president of communications 

“It’s better than we thought,” he told RVBUSINESS.COM. “It’s not up to last year (when 560 dealers were registered). But to be honest with you it’s better than what we had  budgeted for. We’re very pleased with this turnout but we would like to get it higher.”

He said RVDA would mount a big push this week to urge dealers to sign up to take advantage of the best rates to attend.

“We knew it was going to be a tough year, but we think we have put together a good value proposition for dealers,” he said. “We have good workshops, good hotel rates at the Rio and tried to keep all costs down. It will still be a very important meeting.”

RVDA has tracked 160 dealership closings since 2008, but with RV production picking up across the U.S., there are signs that the worst is over.

“That’s what we’re hearing from a lot of dealers,” Ingrassia continued. “You’ve got to feel like it will be better in 2010. but some dealers are still having a lot of issues. We’ve built the (Expo) program  around that — financing, business planning and human resources. These are issues dealers have to look at when they get ready for the recovery.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Stat Survey’s Walworth to Lead RVDA Convention Panel

July 29, 2009 by · Leave a Comment 

2009logo1The RV industry’s “retail scorekeeper,’ Tom Walworth of Statistical Surveys Inc., will lead a panel discussion examining the current economic factors affecting the RV industry during the Recreation Vehicle Dealers Association (RVDA) International Convention/Expo Oct. 6-9 in Las Vegas.

The panel of industry experts will include Mark Beecher, Bank of the West senior vice president for sales and marketing,  and Derald Bontrager, president and COO of Jayco Inc. Panelists will focus on the mindset of today’s RV traveler and what products they will buy, how these trends will impact the market, and how dealers can better position their dealerships for success. 

The panel discussion, titled “RV Market Rebound, Are You Prepared?” is set for Wednesday, Oct. 7, at 2:30 p.m. Another high-profile panelist will be announced in the next few weeks, according to a press release.

“We are fortunate to have three of the most knowledgeable people in the RV industry join us for what will be an interesting and informative session as we prepare for the recovery that we know is coming,” said Rick Horsey, RVDA Education Foundation chairman.

This is one of the workshops that are planned for the RV Dealers International Convention/Expo featuring the RV Learning Center, which will be held at the Rio All-Suite Hotel & Casino.

For more information and to register, visit the convention section of www.rvda.org and follow the RV Learning Center and convention on Facebook and Linkedin

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Walworth: Motorhome Market Signals Improvement

April 14, 2009 by · Leave a Comment 

Tom WalworthThe nation’s RV dealers are clearing out their motorhome inventories at such a rapid pace that  a shortage of motorized units could develop in the near future.
 
 So says Tom Walworth, president of Statistical Surveys Inc., reflecting on the latest retail  buying data his Grand Rapids, Mich.-based firm collects from retail registrations.
 
 Retail sales in February again outpaced wholesale deliveries, continuing a trend that now  reaches back to last spring, he said.
 
 Commenting on the complete results, which will be released this week, Walworth noted that  dealers sold 1,407 Class A and C motorhomes in February, while manufacturers delivered just  700 units.

 In January, dealers sold 1,070 units, while taking delivery of only 600 units.
 
 ”Now, February being better than January is not unusual,” said Walworth, who also monitors retail sales for the manufactured housing, cargo trailer and marine sectors. “It would go up anyway due to the time of the year. The story is the fact that the retail is outpacing wholesale, and the gap widened in February.” 
 
“That wave started in 2008 and continues through February of this year,” he said, adding that he doesn’t recall another year starting out with such an imbalance between retail and wholesale.
 
“Yes, I would say we’re getting our inventory in line. We may have shortages of motorhomes out there.”
 
“Year-over-year, retail sales are down,” he added, “but they are still exceeding wholesale and it’s growing.”
 
For an industry just starving for good information, Walworth noted, this is encouraging news.
 
For all of 2008, dealers bought 26,490 motorhomes and sold 27,671, a difference of 1,181 units or 4%.
 
Specifically, Walworth noted, this disparity began in late spring and accelerated most of the rest of the year. Wholesale exceeded retail sales by 3,200 units through May 2008. Starting in June, however, that trend reversed itself and retail sales began to exceed wholesale.
 
The message for lending institutions, Walworth said, is that there is a demand for these types of discretionary purchases right now, and that sales in many cases are indeed getting financed. The trend is nationwide, as far as he can discern. “Retail sales are taking place; demand continues to be out there,” he said. “We have been begging for people to ease up credit and help floor these units. Here’s a great example of why we say that.”

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

RVB Q&A: Walworth Offers RV Market Overview

March 11, 2009 by · Leave a Comment 

The following is an interview with Tom Walworth conducted by RVB Publisher Sherman Goldenberg offering insight into the current state of the market. Walworth is president of Statistical Surveys Inc., a Grand Rapids, Mich.-based firm that tracks retail information for the RV, manufactured housing, marine and commercial trailer markets.

RVB: Tom, when is the market going to bottom out?

Walworth: While you can say the market is really crippled, I don’t believe it as crippled as it appears because they (finance companies) are not allowing the new products to come onto the market. Manufacturers debuted new products from Louisville – lighter models, more gas efficient lines, newly designed teardrop towables – all this stuff, and the dealers can’t stock it in the volume that they need it on their lots. And the product they have on their lots continues to sell. Demand for RV’s is still out there.

RVB: Is the credit situation in this market any different than other markets?

Walworth: It’s all the same. The marine and automotive industries have the same problem with flooring.

RVB: Do you think that the stimulus program that’s being introduced along with the tax elements that go along with it will be beneficial to the RV industry?

Walworth: There are some benefits. They are giving some favorable tax advantages right now to the motorhome side of the industry. I don’t believe it’s coming to the towable side. But certainly that will help.

When President Obama was in Elkhart, he outlined the need to come up with a program. In fact, they called our office looking for information in developing incentives for the RV business. Will it be enough? Probably not. We need to have the flooring open up so that dealers can start stocking the product they are selling. If you put the right product on the dealer’s floors, this market will take care of itself.

RVB: How long do you think it will take for dealer inventories to drop to the point that wholesale outpaces retail?

Walworth: What’s happening right now is that the lien holders are changing the mix on the dealers’ lots. Everybody buys a clunker every now and then – you always have some product that is not moving. What’s happened, though, is that that’s the only thing left on a number of dealers’ lots. So, somebody comes in to look at an RV but sees that it’s stuff they don’t want to buy. They (lenders) aren’t allowing an influx of new stuff so dealers can get some movement.

Now, if they are allowed to increase inventory on their lots, they are going to get some people in to sell new product or make a deal on older product. But if they have nothing to entice the consumer to come to the lot, it’s not going to happen. Wholesale is only going to outstrip retail in a growing market. We are not in a growing market.

What we have in this industry is a five-month selling window from April through August; it’s a bell shaped curve. You can go back historically 30 years and see that bell-shaped curve. Our industry ordinarily cannot make enough product to meet that demand. Our industry always has to do some loading in the spring. And right low, loading in the spring is seen as bad by the financiers. You have to increase inventory to meet the demand of the summer. If we don’t start increasing inventory now, we are not going to be able to meet demand in the summer and it will be a self-fulfilling prophecy that this will be a terrible year.

RVB: Normally, a lot of Louisville Show purchases start delivery in March, right?

Walworth: Right. And what’s happened is they’ve made the purchases in Louisville and they can’t get them delivered because the guys at the flooring end of things are so conscious of inventory that they’re holding back what normally has to take place.

RVB: How bad is the glut of dated units out there?

Walworth: I don’t really have an idea about what the dated inventory is out there. Obviously, there’s ’07’s. That was a big shipment year. And ‘08 products certainly were held back due to the slow market that was taking place. As you know, RV shows that didn’t ordinarily let older units in are relaxing the standards and letting them bring older units in for their displays.

RVB: So, Tom, back to the first question. When is this market going to bottom out?

Walworth: I think if they were able to bring that new product developed for the Louisville Show to market, you’d see the retail market respond. There is a lot of pent-up demand just waiting for the right product. But as they (finance companies) continue to change the mix on the dealer’s lots so that it’s not an attractive product that is out there, people probably aren’t going to go after it.

So, I would say that you will see this market start to come back in April/May. First off, product is the cheapest, most affordable it’s ever been because manufacturers have given incentives. Dealers are accepting thinner margins. Interest rates are at historic lows and we are back to fuel prices from four years ago. You will not see $4-a-gallon gas this year, I guarantee it.

There are a lot of incentives out there. So, sooner or later here, people will start to turn the corner; consumer confidence will pick up. With the current administration, you have so many positive reporting events – Obama gets along better with the media than Bush did — that you are going to see the consumer feeling good about themselves and probably getting into the market. You can’t hold them out forever. There are things happening out there.

RVB: What sorts of strategies will RV builders develop from all of this?

Walworth: Successful manufacturers are going to look at consumer demands. Temporarily, they are going to come out with light, more fuel-efficient units. But in the long run, that’s not what the consumer wants. The consumer wants space, home-like items and that’s not going to be low-end units.

Back in the early ’80s, ultralight units brought people into the showrooms and they sold, at least initially. But what consumers clamored for were the big fifth-wheels, the big Class As, the diesels, all that stuff. They will come back to that product.

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]

Bottom