Manufacturers and others give a collective thumbs-up on the current health of the recreation vehicle industry, and what the future holds.
By Justin Leighty
Midwest Editor, RV Business
Editor, Woodall’s Campground Management
The motorhome industry is riding a big wave, as growth in motorhome sales soared in 2013 after strong growth in 2012.
“We have lived through some very difficult times during the recession, and it is gratifying to see things starting to return,” said Sheila Davis, spokeswoman for Winnebago Industries of Forest City, Iowa.
Tim Graber, a general manager for Forest River’s Type C motorhome production in Elkhart, Indiana, said, “It was a fantastic year, not just here … but we had a record year. At the end of September we closed that month as a record year already. Everything from that point forward was bonus business.”
Jeff Kime, president of Elkhart, Indiana-based Thor Motor Coach, said, “The motorhome market is up 30 percent this year, which is very robust. We are up even more, at 55 percent, and are gaining market share.”
Comments such as these seem to proliferate among RV industry officials after a particularly strong 2013.
RV Shows Continue To Grow
At “America’s Largest RV Show,” held in Hershey, Pennsylvania, in September 2013, attendance records were set, and more products were on display than the previous year.
“We are very pleased with both the increase in show space and attendance,” noted Rebecca Lenington, executive vice president of the Pennsylvania RV & Camping Association (PRVCA), host of this annual event, which some consider the bellwether show for the upcoming RV model year. “We sold out of booth vendor space inside the Giant Center very early and added 56 booths outside to keep up with the demand, while manufacturer space was extended even further into the parking area.” She indicated that PRVCA plans to increase vendor space for 2014.
In October 2013 the California RV Show at Fairplex in Pomona reported 28,894 people attending, a jump of 39 percent over the show’s 2012 numbers.
“Our opening weekend was terrific, with nearly 14,000 attendees on hand, and that really set the pace for the entire show,” said Tom Gaither, Western show director for the host, Recreation Vehicle Industry Association (RVIA). “There was a high level of consumer interest, steady business activity, and a strong sense of optimism among exhibitors about the regional and national RV market moving forward.”
Larry Meredith with Forest River Inc. added, “This is the best consumer traffic I’ve seen at the California RV Show in the past 10 years or more. The parking lots were full, buyers were out, salespeople were constantly busy. It was just a great event.”
Manufacturers See Growth
A look at the numbers shows why the people who build motorhomes are so happy. Through September 2013, the motorhome market was up 36.2 percent in terms of how many motorhomes were built, according to numbers from RVIA.
Retail numbers were similar. Through the end of September 2013, retail registrations for motorhomes were up 32.8 percent compared to the first nine months of 2012, according to Statistical Surveys Inc. (SSI), the firm that tracks retail numbers.
The biggest names in motorhomes in terms of retail sales in 2013, according to SSI, are the combination of Forest River and Forest River’s Coachmen RV division, which together captured 25.2 percent of all retail registrations for the first nine months of the year; Thor Industries with 23.8 percent of the market; and Winnebago Industries with 18.9 percent of the retail market.
As Forest River’s Graber said, recent times are “kind of the perfect storm after the terrible storm.”
Bob Tiffin, president of Tiffin Motor Homes, told RV Business at the Hershey show, “We are building 123 units a day and our backlog is about 10 weeks. I haven’t seen business this good since ’06, before we had the meltdown. We’ve had a lot of folks that have been in and out of the business since then. But the old-timers like us have weathered the storm and survived.”
Still, the recent growth hasn’t brought motorhome makers back to where they were before the recession.
The rollercoaster economy definitely affected manufacturing. In 2012, manufacturers built 28,300 motorhomes. In 2009, the total was 13,200. In 2007, prior to the precipitous downslide, the industry built a total of 55,400 motorhomes. In the first nine months of 2013, 28,900 motorhomes were built.
Davis said that while Winnebago is very happy with the recent surge, “We are still operating well below what we were in our peak period of 2004, and there is a lot of room for continued growth.”
Builders Grow To Meet Demand
Perhaps in response to recent trends, the motorhome industry has experienced considerable movement and expansion during the past year.
Jayco Inc. and its Entegra Coach division expanded production in Middlebury, Indiana, by adding 77,000 square feet, according to Ashley Lehman, a third-generation member of the Bontrager family, which owns and operates Jayco. “Most of that is dedicated to Entegra Coach, but we’ve also expanded our Class C production as well,” she said. She added that Entegra, introduced in 2008, produced its 1,000th coach in August 2013.
Allied Specialty Vehicles purchased Monaco and Holiday Rambler from Navistar in 2013 and reorganized as a company to create Allied Recreation Group. The company oversees the Monaco, Holiday Rambler, Fleetwood, and American Coach brands, all now based in Decatur, Indiana.
Thor Motor Coach took advantage of Allied’s production move and bought the former Monaco facilities to expand its operations. “Business is very good for us, and we’re able to spread out and increase production,” Kime said.
Winnebago also announced expansion plans recently, leasing a 100,000-square-foot plant to handle increased production of the company’s Type B motorhomes. “This is a definite win-win for us,” Randy Potts, Winnebago chairman, CEO, and president, said.
Motorhome Market Has Changed
The mix of motorhomes available for RVers is different today from what it was before the recession.
Winnebago’s Davis noted that before the recession, the motorhome industry resembled the housing industry. “The financing was pretty loose, and we found customers in that time period wanting the biggest and best products. There were a lot of diesel products at that time. There has been a big shift to more value products today.
Jayco and Entegra’s Lehman said, “Overall the main focus of Jayco is to stay innovative. We’re always trying to get more floor plans and more features. I think in the next year you’ll see more of that. I expect to see new models reaching out into a new market segment.”
Graber said that Forest River and other manufacturers are likely benefitting from pent-up demand after the crisis of 2008. “There are a lot of factors in our favor,” he said. “Gasoline prices have been pretty reasonable; we’ve gotten sort of calloused to having to pay $3.50 for a gallon of gas. Interest rates are very affordable; banks are lending again.”
The long-term effects of the recession have been good for motorhome buyers, he added. “Everybody’s trying to add more value and trying to keep prices down. I think in the industry that awoke a trend for being price-conscious. It worked in the favor of the consumer, because the consumer got products that were chock-full of extra benefits and features, and the prices stayed competitive.”
What’s New And Different?
One intriguing motorhome introduction in 2013 was Thor Motor Coach’s new Vegas and Axis, what they’re dubbing as “RUVs,” or recreational utility vehicles.
The Vegas and Axis are Type A motorhomes that are built on Type C chassis. Thor engineered them to drive like a SUV, and with a size just over 25 feet long and 8 feet wide, that contributes to the effect.
Lehman said Jayco’s introduction of the Precept earlier in 2013 helped Jayco’s entry into the gas Type A market.
In 2013 Winnebago rolled out the Vista, billed as an affordable Type A motorhome, and introduced the Trend and Viva on the Ram ProMaster chassis, an industry first. The company also debuted the Travato, a Type B based on the ProMaster chassis. Type A diesel introductions included the Forza and Soleil. “We are trying to build a niche on consumer demand,” Davis said.
An old name may come back onto dealer lots in 2014, too. Hank Schrock, a former RV industry executive who now runs a dealership in Elkhart, plans to get back into the production industry by reviving the Sterling brand. Like Thor Motor Coach’s new RUV concept, Schrock’s Sterling will be a small, easy-to-drive Type A gasoline-powered motorhome.
Looking Down The Road
What lies ahead? According to RVIA chairman Doug Gaeddert, after a strong 2013, “The transition into 2014 is basically going to be seamless. It’s going to be continued, steady growth for the industry.” He called RVing a “very viable, vibrant, popular lifestyle.”
Sentiment in the manufacturing industry is that RVers will see more and more people joining their ranks in the years to come. Not only are more baby boomers approaching retirement age, but an increasing number of young families are buying RVs, according to RV dealers and industry watchers.
Combine that with campgrounds reporting growing interest in outdoor recreation, including people starting out by renting cabins, and the future could be pretty rosy for the motorhome lifestyle.