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Is RV Industry Headed Back From the Brink?

Category: uncategorized
Source: WSBT, South Bend, IN
Publish Date: Thursday, December 3, 2009
Summary: It's a phrase that's been repeated by local RV manufacturers and suppliers for the last few months, as sales numbers trend up. But is there proof that the RV industry is "back," or is that optimism all talk?

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LOUISVILLE, KY — It's a phrase that's been repeated by local RV manufacturers and suppliers for the last few months, as sales numbers trend up. But is there proof that the RV industry is "back," or is that optimism all talk?

At the annual RV Industry Association National Trade Show, experts said the numbers do show a turnaround could be underway, driven almost exclusively by an uptick in demand.

Inventories are down, so dealer orders are up

Long Island, NY RV dealer Jim McAlpin hopes that means consumers are ready to buy.

A Tough Year

He's had a tough year. To say sales have plummeted at his Grand Am dealership lately might be putting it mildly.

"About two years ago, we used to sell 500 [RV's per year.] Now, we're doing 250. It's exactly half of what it was," he said.

Still, McAlpin feels lucky.

Many dealer numbers are much worse — down as much as 70 percent. Grand Am has it so good, in fact, that McAlpin's dealership is one of only nine in the New York City area whose doors are still open.

He's also one of many who say they've survived the worst of an unprecedented economic storm.

"Two years ago, it looked a little gloomier. Now, it's like when the thunderstorm ends. The sun comes out, and you feel good," McAlpin said.

He's not the only one ready to put away the umbrella.

An Upward Curve

At Elkhart based Forest River RV, dealer sales are up from last year's RVIA show.

"They're up probably 150 percent, easy," said Forest River General Manager Doug Gaeddert.

It's indicative, Gaeddert said of trends to come for the larger economy.

"The RV industry, we are generally first into an issue of a slowdown as an industry. And we're generally first out," he said.

That could also mean big changes ahead for local unemployed workers.

"Virtually every plant is five days a week, and some of them are near capacity right now," Gaeddert said. "I would expect that trend to continue."

The story is the same at Keystone RV in Goshen, where signs these days read "hiring."

"We laid off close to 900 people, and we've brought about 500 back," said Keystone President & CEO Ron Fenech.

"I don't want to oversell what we think is going to take place because we're still in a recession in our country, but it feels like we're coming out of it. There's an expectation for things to be better that's got everyone feeling pretty positive."

Keystone executives plan to open four plants in Goshen by the end of next year, along with another plant in Oregon.

They're not alone in expansion plans.

Growth Underway

Elkhart based Heartland RV plans to hire 200 new workers at a job fair on December 5.

Jayco RV in Middlebury, Dutchman in Middlebury, Cozy Traveler in Elkhart, Gulf Stream in Nappanee and many other manufacturers have also increased their workforces after recent boosts in dealer demand. Many expect that trend to continue.

"I believe you're going to see a 20 percent to 30 percent increase in manufacturing soon after the Louisville show. And that's based on orders we're receiving from the smaller dealerships across the country," said Gulf Stream Motorhome Division Vice President Claude Donati.

Gulf Stream is also "standing by" to move forward with plans announced last spring to begin building light-duty hybrid-electric pickup trucks in partnership with Wakarusa-based Electric Motors Corporation.

"We're prepared to move forward with production and installation of the engines once EMC gets their project moving along. They're waiting on some issues with grants and financing," Donati said.

Donati says Gulf Stream's future is independent of that project.

"It's not key [to our future]," Donati said.

Cautious Optimism

Fenech says it's too soon to say the industry is definitively back from the brink.

"Things are looking up, but they're looking up relative to some pretty bad numbers. So, we're not back. We're heading in the right direction. Things look very positive, but to somehow breathe a sigh of relief and believe we don't need to be careful in the choices we make as manufacturers, I don't think that's the case," Fenech said.

That hasn't dampened excitement or resolve to innovate.

New technology, expanded options, lighter vehicles and lighter price tags are now driving the market, as manufacturers work to attract a new type of consumer who wouldn't have even considered RVs in the past.

They are members of a "younger" generation, under the age of 35, discovering the RV lifestyle for the first time. According to the RVIA, they are the fastest growing segment of the RV market over the past five years.

They're also a big reason for McAlpin's new found optimism.

"Campgrounds are going to have a record year, an all-time record year," he said. "That's a good sign."

His hope now is that they will help the industry turn the corner toward greener pastures ahead.

That green will include things like solar cells, wind turbines, fuel cells and bio-diesel. How will it all work, and when might you see that new "greener" RV on a sales lot near you?

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