RV industry enjoys slight improvement in 2011

Again, this is not me nor my wife or kid. But I thought
this stock photo from Go RVing was appropriate
since the season's first snowfall was on the ground.

According to an Associated Press article by Bruce Schreiner, the RV industry pointed to a slight improvement from last year's turnaround performance as another sign the recession-dented sector is on the road to recovery.

But a slight speed bump might be on the horizon, Schreiner warned.

RV makers, dealers and suppliers attending an annual industry trade show late last month were told that 2011 shipments from manufacturers to dealers are expected to be up 2 percent from last year's 242,300 shipped units. The 2010 total amounted to a 46 percent gain from 2009.

"You guys sitting in this room today are all survivors in this industry, and I think that bodes very well," Richard A. Coon, president of the Virginia-based Recreation Vehicle Industry Association, was quoted as saying.

Despite the upswing, Schreiner wrote that the recreational vehicle industry still has considerable ground to cover to catch up with pre-recessionary levels.

Far be it from me to state the obvious, but in rgeard to the previous statement ... duh. I'd argue that pre-recessionary levels of most every consumer item in the same category as an RV were much higher than what they are now. The economy still isn't back to where it was, so don't expend consumer spending to be there, either.

Still, it's good to see the figures remain the black.

In 2007, shipments totaled 353,400 — the fourth-highest figure in the past quarter century. By 2009, shipments slumped to 165,700 units as older RVs parked on dealers' lots drew scant interest from cash-conscious consumers.

But Schreiner says consumers remain jittery by stubbornly high unemployment, sagging home values and a volatile stock market. As a result, the industry is bracing for a projected 2.6 percent decline in RV shipments in 2012, based on a forecast by University of Michigan economist Richard Curtin.

Here's what I say about that: Can you blame people for being jittery? If you were faced with potential layoffs because your job might be outsourced, or your company might relocate and leave you behind, or simply close its doors and go out of business, the last thing you want to do is buy anything even close to the price of an RV, even if it is "only" $6,000.

"It plays with the psyche of those people that are in our target market," Bob Olson, chairman of RV maker Winnebago Industries Inc., told Schreiner.

Despite lackluster consumer confidence, Olson said, there have been favorable trends — dealer inventories have improved and consumer credit has become more available, especially for less-expensive towable RVs attached to pickups or hitched to the back of another vehicle.

"A lot of tough decisions were made by everybody in that room in order to be here today," Olson said following the trade show's opening session. "You didn't find anybody in the RV industry getting a bailout. We did it the old-fashioned way, with some pretty tough decisions."

Since 2008, the number of RV manufacturers has dropped by 35 percent, Coon said. The ranks of suppliers fell by 32 percent.

Everyone had to make adjustments to survive the nation's worst recession since the Great Depression. I would argue that we're not out of the woods yet, so expect continued adjustments.

Tom Stinnett, an RV dealer in nearby southern Indiana, said he reshuffled his inventory to focus mostly on towables. Before the recession, his lot was divided between towables and more costly stand-alone motor homes.

There's an RV dealership around the corner from my home that was ahead of this curve. All American Coach in Toledo, Ohio, used to sell nothing but motor homes. But I would say about 4-6 years ago the dealership shifted its inventory to include more towables. In fact, I would say that today 90 percent of its inventory are towables.

I'm sure other RV dealers around the country have similar stories.

Towables cost between $6,000 and $100,000, according to RVIA. Stand-alone motor homes range from $50,000 to as much as $400,000 for top-of-the-line, bus-like vehicles.

Stinnett said his business is profitable again after several "brutal years of downsizing and reorganizing."

"We have nowhere to go but up," he told Schreiner. "Three years ago, we were very, very worried about making it through this disastrous time."