RV Industry Tanks (So to Speak)

rv industry tanks so to speak

While talking heads like John McCain bob and wobble about the state of our economy, for the RV industry there is no doubt. It's recession time. Forest City, Iowa's famous Winnebego has seen their earnings fall by 67 percent this past quarter, after ten years of straight growth. The obvious reason not to buy a giant motor home: gas prices. As we saw yesterday, prices everywhere are up, up, up. Especially diesel. What kind of mileage does a typical RV get? Gas-powered homes-on-wheels manage about five mpg, whereas the diesel rigs average nine mpg. More troubling though, is the prospect that people aren't buying RVs because they can no longer afford big-ticket items. Especially as the typical RV owner is in the sweet-spot of the disposable income range: empty nest, soon to be retired boomers, aged 55 – 60. I mean, if not them, who? Cutting back on land yacht road trips because of a temporary spike in fuel prices is one thing. Not buying the behemoths in the first place is another. (As is buying your dream RV and then having a bank repossess it.) Bottom line: RVs might just be gigantic dead canaries in a very toxic coal mine.

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  • Jthorner Jthorner on Apr 17, 2008

    I've been wondering when the fuel price spiral was going to tank RV sales. You only need a fraction of the owners of current lightly used units to pull the plug and put theirs on the market in order to really tank things for the already falling new RV sales. I remember the gas crunches of the 1970s very well. At that time GM and FMC were both making some of the best built RVs in the industry, and they bailed in short order. The entire RV industry went into a tailspin then. In the 1990s people pretty much forgot what it had been like .... and now here we go again!

  • Nikita Nikita on Apr 17, 2008

    I guess the very rich dont feel it. Cessna is increasing light aircraft production and introducing new models. This week average fuel price for aviation gasoline was $4.97, jet fuel $5.19.

  • Radimus Radimus on Apr 17, 2008

    I have to wonder if it really is the price of gas that is effecting the RV industry. I think that perhaps the downturn in the real estate and credit markets would have a bigger influence. Reason being that many mid to high end RV's are bought by retirees and empty nesters that just sold the house to pay for it. If you cannot sell the house, or sell it for enough to clear the mortgage(s) and have enough left to put towards that nice big Class A RV then you're out of the market or you're looking at something used or cheaper. And with credit being tightened, fewer people are going to get approved on the loans for these things. The MSNBC article seems to point this out as well. The other that there is more than one segment of the RV industry. While the market for class A and class C RV's may be in the tank, the last I heard was that the market for towable RV's is up and growing. More companies are getting into the lightweight towable market, building models that can be towed by CUV's and cars. The market for pop-up campers is thriving as well, since if you own a full-size SUV you can generally tow the biggest pop-up made today with no significant hit to your fuel mileage. Most mileage reports from people towing the big highwall pop-ups with full-sized SUVs come in at around 15mpg because the camper is still below the tow vehicle roofline, whereas towing a travel trailer with the same usually results in a 5mpg hit because of the height. They're not unlike dragging a barn door down the highway. But like was eluded to earlier, the cost of fuel is not that big of a factor in the financials of RV ownership. Depreciation is far greater. At any rate it looks like there will be some sweet deals in used motorhomes coming.

  • Wheatridger Wheatridger on Apr 17, 2008

    The bigger they come, the harder they fall! And it's no bad thing; these slow-rolling homes seem like the worst of both worlds, too large to drive and too small to live in. Begone with 'em, I say. But I'm keeping mine, for the moment. It's a 16-foot Scamp, which to the uninitiated resembles a fiberglass egg on wheels. Inside, it's not much more than shelter, with four almost-comfy beds and a gas cooktop. Other luxuries are available, but we're keeping investment and weight low as we can. At one ton even, it's towed easily by my Forester. Eighteen mpg is our usual result when towing. Small trailers like these remain in high demand. They're made only by a handful of US and Canadian manufacturers, who do little advertising. You won't see them on dealers' lots, since every one is presold, usually around $10K and up. They're a slick solution to the family camping problem I faced. My wife hated sleeping on the ground. I could have bought cots, thicker air mattresses and other portable camp luxuries, but the car was already packed full. My choices were three: buy a bigger car, or buy a trailer, or never camp with the family. My marriage is stronger today because I avoided Option 3, and my total family fuel economy average is a lot better off because I avoided Option 1. And I like the Scamp far better than a pop-up tent trailer. It's warmer (or cooler, as necessary), durable with little maintenance, and far handier. It takes me just a few minutes to hitch up and go, and only seconds to stop by the roadside and make a meal. Not that I go out in it all that often. At these prices, even 18 mpg is hard to accept!

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