RV in­dus­try may be do­ing a U-turn

Lured by bar­gains, buy­ers are slowly re­turn­ing

Los Angeles Times - - Business - RON­ALD D. WHITE

Robert and Bar­bara Ni­col­son, re­tired su­per­mar­ket em­ploy­ees from Se­dona, Ariz., re­cently traded in their 2006 mo­tor home for a new Tif­fin Allegro Bus that lists for $355,000. Ameni­ties in­clude a dish­washer, washer and dryer, full-size re­frig­er­a­tor and 11⁄

2 bath­rooms.

“How nice is it? Well, I’m hav­ing a hard time con­vinc­ing my wife that it’s time to go home,” quipped Robert Ni­col­son from a Pe­taluma, Calif., camp­ground.

The cou­ple — he’s 72, she’s 68 — “were very happy with the deal” of un­spec­i­fied pro­por­tions that they ne­go­ti­ated, in which they un­loaded their old 40-footer, Robert said. Added Bar­bara: “We fig­ured, ‘What are we wait­ing for? We’re both healthy. Let’s en­joy it.’ ” RV man­u­fac­tur­ers and deal­ers would love to see more peo­ple like the Ni­col­sons. Dur­ing the last few years, the recre­ational ve­hi­cle in­dus­try suf­fered along with con­sumers be­cause of record-high diesel and gaso­line prices, the re­ces­sion and the credit crunch. Now, U.S. re­tail sales of RVs have risen, al­though by only 3%, to 92,974, in the first six months of the year com­pared with year-ear­lier sales.

Ex­perts and RV deal­ers at­tribute the in­crease to rel­a­tively sta­ble fuel prices, the im­proved econ­omy and the cau­tious eas­ing of credit, es­pe­cially for mo­tor homes that sell for $100,000 and less. On top of that, many deal­ers are of­fer­ing hefty dis­counts to get the big bug­gies mov­ing again.

Joe Altman, pres­i­dent of Alt­mans Win­nebago, said con­sumers were still hold­ing back. The num­ber of peo­ple call­ing and vis­it­ing the Car­son

RVs,

deal­er­ship and hits on the deal­er­ship’s web­site have in­creased 10% to 12% over last year, but sales are only inch­ing up. That’s de­spite some large mark­downs at Alt­mans, such as a 2010 Win­nebago Vista re­duced to $82,939 from $103,716 and a 2008 Win­nebago Chalet dis­counted to $74,939 from $107,755.

To get cus­tomers to buy, “they have to have a feel­ing of wealth in the eq­uity of their homes and in­vest­ments. They have to feel that their in­come stream is se­cure. And if they al­ready own an RV for a trade-in, it’s good if it’s worth more than they owe,” he said.

Altman has been push­ing for sales at the lower end of the mar­ket.

“RVs above $100,000, we’re avoid­ing those. It’s still tough to get a loan for them,” Altman said, adding that cus­tomer ser­vice is more im­por­tant than ever even when peo­ple leave the deal­er­ship with­out buy­ing.

“When they do de­cide to buy, I want them com­ing back here,” he said.

The RV in­dus­try is com­ing off the worst sales pe­riod since 1979-81. Then, it was a mat­ter of high un­em­ploy­ment, fuel short­ages and long lines at fill­ing sta­tions, dou­ble-digit in­ter­est rates and the im­ple­men­ta­tion of the 55 mph speed limit.

Through the first six months of 2008, sales of recre­ational ve­hi­cles of all kinds to­taled 135,451. That was a month be­fore diesel prices topped $5 a gal­lon in some parts of the U.S. and gaso­line rose to more than $4 a gal­lon. In the first half of 2009, sales dropped to 89,839 ve­hi­cles, a de­cline of nearly 34%.

Those num­bers tell only part of the story. The two most ex­pen­sive classes of RVs fell fur­ther than all the rest. Sales of the roomi­est and most lux­u­ri­ous Class A mo­tor homes, ve­hi­cles that can cost as much as $400,000, de­clined by more than 45% in 2009. At the next level, unin-tu­itively la­beled Class C, mo­tor homes that cost as much as $140,000 saw a sales drop of 42%.

The RV in­dus­try’s ups and downs played out at Fleet­wood En­ter­prises of River­side.

One of the old­est names in the busi­ness, Fleet­wood was de­clared the in­dus­try sales leader in 2007. In 2008, it was shut­ter­ing fac­to­ries and slash­ing its pay­roll by 70%. In 2009, Fleet­wood filed for Chap­ter 11 bank­ruptcy pro­tec­tion, and its as­sets were sold. Fleet­wood’s mo­tor home di­vi­sion was acquired by a pri­vate eq­uity firm, Amer­i­can In­dus­trial Part­ners.

Many long-stand­ing RV owner groups have dis­ap­peared. The Cal­i­for­nia chap­ter of the Fleet­wood Trav­el­cade Club, founded more than 50 years ago, was at­tract­ing so few RVers to gath­er­ings that lead­ers de­cided to dis­band last March.

“We used to get 500 RVs at our events. The last one we held, in Yuba City [Calif.,] in March, had 78 RVs. That was the swan song of our club,” said Kathy Sex­ton, whose hus­band, Mike, served as the group’s last pres­i­dent.

Sex­ton said some of the old mem­bers would try to stay to­gether in a new group they have dubbed Cal­i­for­nia Dream­ers. A planned get-to­gether in Hemet is ex­pect­ing to at­tract just 10 cou­ples.

“We’re not ex­pect­ing to have more than 20 rigs at our events,” Mike Sex­ton said. That’s in spite of the fact that the new club will wel­come own­ers of all makes and mod­els of RV, not just Fleet­woods, as the old group had.

Even now, as sales re­cover, most of the in­crease has come in cheaper seg­ments of the RV mar­ket. Mo­tor home sales are strong­est among Class B of­fer­ings, which top out at around $74,000, while the gen­er­ously ap­pointed Class A va­ri­eties are still on the de­cline com­pared with 2009, with sales down 8% through June to 5,242 ve­hi­cles. That was half the num­ber recorded dur­ing the first six months of 2008.

Those who have been buy­ing dur­ing this pe­riod have been fru­gal types will­ing to be pa­tient and fight for a bar­gain.

Chuck and Alice Jarocki of Clo­vis, Calif., bought a “pop-up” fold­ing trailer camper about a year ago on E Bay for just $5,500 af­ter a deal­er­ship grew weary of try­ing to sell it for nearly $9,000.

The Jarockis are avid campers who de­cided it was time for a step up from tents and sleep­ing bags on the ground.

Their trailer has a heater with a reg­u­lar ther­mo­stat, a re­frig­er­a­tor, a three-burner stove, an out­door shower and a por­ta­ble toi­let. Best of all, the Jarockis say, it has a queen-size bed.

“That sleep­ing bag just wasn’t cut­ting it,” said Alice, 73. Chuck is 80. “You can stay in this trailer for a week and still be com­fort­able.”

Gina Fer­azzi

HOUSE HUNT­ING: Barton Hol­comb, a Mur­ri­eta re­tiree, checks out a new mo­tor home at Mike Thomp­son’s RV Su­per­store in Santa Fe Springs. Hol­comb al­ready owns an RV and was think­ing of trad­ing up.

Pho­to­graphs by Gina Fer­azzi Los An­ge­les Times

READY TO ROLL: Mo­tor homes in sev­eral shapes and sizes await shop­pers at Mike Thomp­son’s RV Su­per­store in Santa Fe Springs. Sales of the least ex­pen­sive mod­els are driv­ing the mar­ket now.

THAT NEW RV SMELL: Sales­man Pa­trick Henry, right, as­sists shop­pers Karin Meyer and Barton Hol­comb of Mur­ri­eta at Mike Thomp­son’s RV Su­per­store.

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