You choose, we deliver
If you are interested in this story, you might be interested in others from The Journal Gazette. Go to www.journalgazette.net/newsletter and pick the subjects you care most about. We'll deliver your customized daily news report at 3 a.m. Fort Wayne time, right to your email.

Business

  • Jobless rate falls to 4.9%
    The bleeding stopped last month.Unemployment in metro Fort Wayne declined to 4.9 percent in August, compared with 6 percent in July – the third consecutive month the jobless rate fell.
  • Business leaders off to Japan
    John Sampson, president and CEO of the Northeast Indiana Regional Partnership, will lead a delegation of representatives from Fort Wayne Metals, Indiana Michigan Power and the LaGrange County Economic Development Corp. to Japan.
  • Metro area reports unemployment decline
    Metro Fort Wayne unemployment declined in August to 4.
Advertisement
Locally
Fleetwood RV in Decatur is benefiting from the renewed interest in leisure travel.
“We have seen an increase in retail motor home sales in the past 120 days,” John Draheim, CEO and president of Fleetwood RV, said in an emailed statement.
“This increase in consumer demand has caused our dealers to provide us with more orders, and prompted us to increase production rates twice in the past 60 days. We are optimistic heading into the winter show season,” Draheim said. “We have a stable employee base just under 1,200 people and will run production over the normal holiday shut down this year due to the stronger order position.”
– The Journal Gazette
Winnebago shows off its Minnie towable RV at an industry trade show Tuesday in Louisville, Ky.

RV makers gain speed in ’12

Demand up 10% this year, expected to grow in ’13, too

Associated Press photos
Ted Georges, of Columbus, Ohio, jumps into a pool near parked RVs at Daytona International Speedway on July 6.

– The RV industry’s recovery from the recession has picked up speed.

Recreational vehicle makers are churning out higher numbers of travel trailers bound for dealers’ lots and, ultimately, campgrounds.

Overall shipments from manufacturers to dealers – a key measure of consumer demand – are expected to rise 10 percent in 2012 and could gain an additional 4.5 percent next year, the Recreation Vehicle Industry Association said last week.

Through September, shipments were up nearly 11 percent from the same period last year, the group said.

The higher-than-expected number had dealers, manufacturers and suppliers feeling more optimistic as they gathered for an annual industry trade show.

“We made up a lot of ground this year,” said Jeffrey Pastore, owner of Hartville RV Center in northeastern Ohio. “We’re seeing a lot more buyers walking in the door, and we’re seeing those buyers with more money in hand.”

Sales at his dealership are up 18 percent this year, and he’s predicting an additional 15 percent gain in 2013. It’s a big turnaround from 2009, when sales plunged 40 percent amid the country’s worst downturn since the Great Depression.

“It was dreadful,” said Tom Stinnett, an RV dealer in southern Indiana. “There were a lot of us wondering if we were going to make it.”

Shipments to dealers slumped to 165,700 units in 2009 from 353,400 in 2007. Weak demand and evaporated credit left dealer lots clogged with RVs and forced the industry to lay off tens of thousands of workers. This year’s shipments are expected to be better – hitting 277,300.

Jobs are coming back, too. The industry’s workforce has risen to 375,000 from less than 250,000 in 2008, according to RVIA. It’s still below the 530,000 from 2007.

Driving the industry’s gradual comeback have been less-expensive towable RVs attached to pickups or hitched to other vehicles.

Towables, which now account for about 90 percent of the new RV market, cost between $8,000 and $100,000, with an average price of $32,000, according to RVIA. Before the recession hit, towables represented eight out of every 10 new RVs shipped.

By contrast, stand-alone motor homes range in price from $55,000 to $1.5 million for top-of-the-line, buslike vehicles. The average price is $100,000 for the amenity-filled moving homes.

“It’s a given that consumers love to do this or there would be no market at all because they don’t have to have it,” Stinnett said. “But they’re simply not willing to commit as much money.”

KZ RV, based in Shipshewana, has regained about three-fourths of its pre-recessionary business, but the manufacturer has seen the shift in consumer demand toward towables. Its most popular products cost between $10,000 and $35,000 – well off its top-of-the-line RVs, which run about $90,000, said Andy Baer, the company’s vice president of sales.

“Seven years ago they didn’t give a thought to buying a top-of-the-line product, kind of similar to the housing industry,” Baer said. “People are more in tuned with what the reality is that they can comfortably afford today.”

Ann Arbor, Mich.-based Thetford Corp., which supplies toilets and sinks to RV makers, saw its business plunge by 70 percent during the recession. It survived the downturn because RV owners upgraded existing models, Executive Vice President Kevin Phillips said. Now, the company is having a good year as existing RV owners buy upgrades and entry-level buyers enter the market, he said.

Winnebago Industries Inc., best known for its premium products, also has adjusted to the new market.

The company, headquartered in Forest City, Iowa, is rolling out towable products again after a decades-long absence from that market.

And Winnebago has stepped up its presence in the market for entry-level motor homes priced in the $60,000 to $70,000 range. Those vehicles offer fewer features and amenities than their pricier counterparts.

“That’s where we see a lot of the movement in the industry,” said Scott Degnan, the company’s vice president of sales.

Winnebago’s profits soared in its last fiscal year, which ended Aug. 25. Winnebago earned $45 million over those 12 months, up from $11.8 million in the prior year.

Advertisement