RV towable sales slowing?

[goducks10]

Dealer Poll: New Towable Inventories Too High
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December 29, 2018 by RVBusiness Leave a Comment

Editor’s Note: The following report by Recreation Vehicle Dealers Association (RVDA) Director of Industry Relations Jeff Kurowski, appearing in the December issue of RV Executive Today, breaks down results from a recent Baird dealer sentiment survey.

Dealers surveyed late in October said their new towable RV inventories were too high, while their used towable inventories were balanced, according to Robert W. Baird & Co., the Milwaukee-based investment firm that surveys dealers quarterly in partnership with RVDA.

The Baird firm feels dealers’ belief that their towable inventories were too large was fueled by the desire they have each year to reduce inventories during the fourth quarter. Higher interest rates also were a factor. As one dealer wrote, “There is too much inventory on dealers’ lots. We have to get better inventory turns to make money, as our profits have been interest rates, we can’t afford to stock what we once did.”

Another dealer added, “I’m hoping the industry is just catching its breath after some very strong years. I still expect 2019 to be very good – consumer confidence is high and the local economy strong – all should offset higher costs and interest rates.”

Dealers surveyed in late October said they had a 120-day supply of towables, compared with 114 days in late July and 114 days in October 2017.

Commenting on retail demand for towables during the August through October period, one dealer wrote, “I’m not sure what happened this fall; it started to slow in August and never re-gained momentum.” Another said, “I had a record August- October last year, but this year was about the same as 2016, so it was a bit disappointing.”

Tet another dealer reported his towable unit volume is up 7 percent, but his gross sales revenue is up only 4 percent, due to a shift in the product mix to smaller and lower- priced trailers. Another dealer said, “We continue to see weakness in stick and tin. Margins are stressed. The selling point that works is under $20,000, but the unit needs to be 28 to 30 feet. We are dumping at any cost; the gap between fiberglass walls and stick and tin is closer than in the past. Customers are comparing floor plans more than exteriors or unit class.”

In the motorized sector, dealers estimated their days supply was 119 days as of late October, which was lower than 127 days in late July and 129 days as of October 2017. But one motorhome dealer reported that “higher interest rates are negatively effecting overall business and are the reason for flat sales for new units and a big increase in sales of used.”

Another dealer said that Class As are “questionable in our market today, but Class Cs are still doing well.” Yet another reported, “The price point is changing – we’re selling more gas to diesel and seeing a good turn on diesel Class Bs when we can get them.”

[Mbiviano]

I agree with pnichols. We use the RV to sightsee the country with our kids, but it's glamping not camping. They look forward to the summer road trips each year.

[toedtoes]

I don't think we can have it both ways. Campgrounds are filling up faster than ever nowadays - so that doesn't hold with the "generation isn't into camping" argument.

I think it's a matter of how people buy their RVs and their lifestyle.

First, many folks who are now in their late 40s to 60s chose not to have kids or just have one. Their RV purchasing doesn't change a whole lot between their "raising kids" period and their "empty nest" period. So they aren't as likely to trade in their rigs as frequently.

The older generations and younger generations have tended to have 2 or more kids, so that lifestyle change affects their choice of RV and will more likely result in a trade in. The younger generations haven't yet passed the raising kids stage so they stick with the one rig and plan on waiting for trading in until the kids are grown.

Then you have the simple fact that the Gen X and under are less likely to be as successful as their parents. So, that "disposable income" that the older generations had to purchase multiple RVs in sequence isn't available for the most recent retiring folks. And retirement age has become extremely variable - rather than the old standard of 65. Now you have folks retiring at any age between 40 and 80+. So, there isn't an entire generation reaching a "we're retired, let's RV" stage all at the same time and making a large impact on sales in a short time frame. Now the purchases are spread out much more.

I also think that the Baby Boomer generation is more likely to trade in their RV in shorter timeframes. The older and younger generations are more likely to stick with one for an extended amount of time. As that generation ages, those folks who were trading in for a new rig every 3-6 years are starting to drop out of the RVing world.

And perhaps the "to heck with family ties, let's go fulltime" attitude has begun to fade. The younger generation is more likely to take the entire family along or do it when the kids are young and the grandparents are still healthy.

[pnichols]

Camping "just to be camping", per se, is not where it's at IMHO.

Camping is something you do because you're "out there for another reason". The DW and myself sightsee nature, fish, rockhound, hike, take pictures - all in specific places where over-nighting in our RV makes it comfortable during meal times, in the evenings, and when resting/sleeping.

Our grandkids loved the last time we took them "camping" ... but what we were doing during the days was such things as taking them to a desert quarry out in the wilderness to dig their own fossils (which they had never done) and taking them to a spectacular high desert lake to ride Sea-Doos. Camping in the RV was just a home base at the end of each day.

When camping is necessary as a means to another ends, camping is viewed differently.

[okoboji_fan]

Does anyone think that maybe rv quality and service after the sale might be contributing factors ? Lots of negative stories out there regarding the pride of ownership in new rvs

[lfcjasp]

old guy wrote:
I don't think the generation coming up has been given the thrill of camping and so no interest in it. and new TT's are not freebies

IDK, it seems a lot of them, the 20-30 something crowd, are still tenting. They may move up to RVs in time, whether towables or self-driving. I hope so. Also some are building their own rigs and some of those set-ups are impressive...wouldn't work for this Grandma and Grandpa...we like having an air-conditioned camper with a full bath, at least for the night;) But it sure is nice to see the kids out with their little ones getting into camping!

[wrktfsh]

They are overpriced and marginally built.

[midnightsadie]

I think old guy said it best.

[GordonThree]

old guy wrote:
I don't think the generation coming up has been given the thrill of camping and so no interest in it. and new TT's are not freebies

The post-millenial generation isn't really of rv buying age yet, assuming they were born in the mid nineties and early 2000s.

The millennials in their 30s are busy working 60+ hour weeks and only have 7 to 10 days PTO a year, so camping probably isn't a high priority.

Gen X or whatever we're calling post-boomer bought RVs already, and/or are busy competing with millennials for those crummy office jobs.

[goducks10]

SidecarFlip wrote:
Market has reached a saturation point for one and the quality versus the asking prices don't jive today. I have this feeling that the RV industry is about to go bust.

Kids today don't want to go camping, they want to play video games, eat fast food and whine.

BSA attests to that. Looking at going bankrupt from lack of membership.

I think that's a generalized statement. My kids (grown) and their kids (Our grandkids) love camping.
I know what you're saying though. Our GK's do love their video games. But also love camping and boating. Too many choices for kids these days. They all play sports as well.
Honestly though I think a couple of them would love to play video games camping. Good thing their parents say no to that.
One grandson has been in BS as long as I can remember. His brother could care less. Go figure.

[Terryallan]

Market facts. sooner or later. Every one that wants a RV will have one. Yes people will trade up, and there will be a few new users. But is has to top out somewhere. Just like trucks, and cars. They too are toping out. RVs last longer, as do vehicles. And something else to think about. Many younger, and first timers are finding it less expensive to buy a MotorHome, rather than a truck, and TT. Most mid range MHs are less expensive than a TV, and TT combined.

As for me. I HOPE to have bought not only the last TT I will ever have, but the last Truck, and car as well.

[SidecarFlip]

old guy wrote:
I don't think the generation coming up has been given the thrill of camping and so no interest in it. and new TT's are not freebies

Camping in a RV park is a thrill? Surely you jest.

[SidecarFlip]

Market has reached a saturation point for one and the quality versus the asking prices don't jive today. I have this feeling that the RV industry is about to go bust.

Kids today don't want to go camping, they want to play video games, eat fast food and whine.

BSA attests to that. Looking at going bankrupt from lack of membership.

[old_guy]

I don't think the generation coming up has been given the thrill of camping and so no interest in it. and new TT's are not freebies

[GordonThree]

Every RV dealer I've passed on the road recently seemed to be over stuffed with inventory. Lots of towables and lots of class c "Winnebago type" rvs, not so much a.

[DutchmenSport]

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