RV sales on the upswing

To date, RV manufacturers have shipped 224,000 towables and motorhomes, a 47.7 percent increase over 151,700 sent through November 2009, according to figures from the Recreation Vehicle Industry Association. However for the penultimate month of 2010, shipments reached 13,400, a 2.2 percent drop from the 13,700 units delivered in November 2009.

Meanwhile, dealerships are reporting that 2010 brought an upswing in sales compared to last year and are confident of another boost in the year ahead.

"People are just tired of the negativity," said Lee Pickard, owner of Mid-State RV Center in Byron, Ga. "They've adjusted their lifestyle. They've adjusted their savings rate. ...They want to enjoy life."

Buyers are returning and finding products with the price, value and all the features they want, dealers said.

Customers visiting RCD Sales Co. in Hebron, Ohio, are falling into the same 35- to 65-year-old demographic as before the economic downturn, said Brad Haire, general manager. They tend to be working families with disposable income who want to spend time with their families but do not want to hassle with airports.

The recession may have tempered how much they were willing to pay but they still made the purchase, Haire said.

"Their recreation is their recreation," he said. "They're going to do that regardless."

At Olathe Ford RV Center in Gardner, Kan., buyers shifted from putting down money for new RVs to buying used. In fact,

selling used units helped the dealership survive the slump since customers are focused on affordability, said Jim Frum, general manager.

Pre-owned motorhomes and towables still fill the inventory but Olathe is considering adding another line of new trailers to meet the expected growing demand in 2011.

"We're thinking positive down here," Frum said. "We're hoping to increase."

The RVIA is projecting that shipments will hit 239,900 units in 2010, a 31 percent jump over the 2009 total. Year-over-year shipment numbers have moderated in the latter half of this year as dealers have switched from buying to replenish depleted inventory to buying for retail sales.

Mid-State significantly curtailed its inventory as a result of the economic turmoil. Previously, the 22-year-old dealership kept about 60 motorhomes and nearly 200 towables on its lot, Pickard said. Now, it has about 15 motorized units and roughly 100 to 110 towables.

The positive outcome of the rightsizing is that the Georgia dealership is now turning its entire stock 3.8 times each year.

Going into the spring and summer selling season, dealers will have to be especially attentive to their inventory levels or they could lose sales, Haire said. Manufacturers have cut production and employees which, as a result, has increased the amount of time needed to get a new unit.

In the past, dealers could readily get the stock they wanted whatever the season but in the current market, they are being required to reform the way they order, Haire said. RV dealerships are now providing forecasts to manufacturers of what they expect to sell and when.

Last summer, Haire ordered a product in May and did not take delivery until August. Such long lead times can cause missed sales, he said, and probably already have.

Wholesale shipments are predicted to grow to 259,600 in 2011. The recent rise in fuel prices is raising questions about how the RV industry will be impacted and dealers are mixed if paying more at the pump will derail the growth.

Frum believes the climb in gas prices could slow the industry's recovery since families will have to rework their household budgets and likely make cuts in discretionary spending. Conversely, Haire maintained RVing will grow in popularity as long as pump prices are stable and do not widely fluctuate.

Pickard reiterated the conventional wisdom in the industry, saying gas and diesel prices will not matter much to those who love the lifestyle.

"The cost of fuel for an RV is such a minimal part of RV ownership," he said. "To the true RVers, it's not a factor."