Goshen News, Goshen, IN

Business

June 2, 2013

Road to success: RV business is brisk

GOSHEN — The first quarter was a kind quarter for the recreational vehicle industry.

Building on three years of continuous growth, the RV industry experienced an 11.2 percent gain in units shipped in the quarter compared to the first quarter in 2012. And that growth is expected to accelerate.

The industry’s forecast issued earlier this year by Richard Curtin of the University of Michigan predicted a 7.5 percent gain in units shipped for 2013. That gain would mean 307,300 RVs would be sent by manufacturers to dealers. Such a gain would be a significant jump over the low year of 2009, when 165,700 units were shipped during the height of the recession. But a much larger gain would be needed to reach the record year of 2006 when 390,500 RVs went out the doors of local RV factories.

“Every year has been an up year since 2009 if you graph it out,” said Doug Gaeddert, Forrest River’s general manager and chairman of the Recreation Vehicle Industry Association, which compiled the quarterly totals.

“One thing,” Gaeddert said of the reason for the continual gain, “is the economy is in much better shape than the media would lead you to believe.”

He said the bank industry has solved its credit crunch, which resulted in RV dealers being unable to finance inventory during the recession and consumers who wanted to buy RVs having to have the best of credit and lots of collateral.

Another factor in the resurgence of the industry is that more people in North America are reaching the ages where they want to travel and camp in RVs.

“The demographics are in the right place,” Gaeddert said. “So the sun and the moon and the stars are lined up real well.”

Not alone

Others in the industry also realize, like Gaeddert, that good times are here again.

“I think there seems to be a more positive attitude,” said Larry Johns, president of Travel Lite in New Paris. “I think home pricing going up has had a big impact on RV sales going up.”

Home prices posted their largest increase in seven years Tuesday and consumer confidence reached a five-year high in May, according to The New York Times.

Johns said that many people lost 40 percent of their home’s value during the 2008-2009 recession. That experience chilled their desire to purchase luxury items, like RVs, Johns said.

“RVs are not a necessity. It is something you buy with your excess income,” he said.

But that was then.

“I think people are saying, ‘All right. Things are starting to change,’” Johns said.

And Johns believes the pent-up demand for RVs is now being released by consumers who are confident they have a good financial future.

“I just think people’s attitudes are more positive,” he said.

The increase in truck camper and travel trailer sales at Travel Lite has resulted in more jobs for local residents. Johns said the company now has about 50 employees, up from 30 some. And a small outside storage space is under construction to allow for smoother production, he said.

Similar increases in RV employment is occurring across Elkhart County.

Strong sales

Along Ind. 19 on Elkhart’s west side Thursday, Dave Titus was ready to help customers who wanted to buy an RV at his dealership, International RV.

“We are seeing a real high percentage of first-time buyers,” Titus said.

Those buyers range in age from 20 to 80 he said, as young couples are looking for travel trailers to enjoy family camping outings and retirees are looking for motorhomes and larger fifth-wheels to use as retirement bases.

Earlier in the week, Titus said he had sold RVs that ranged in price from $10,000 to $125,000.

Asked if he thinks the industry’s growth will continue, Titus said, “I think it is going to stay strong for the foreseeable future. I don’t know if we will ever hit the heyday of the early 200s, but it is a great business.”

More than RVs

James Bradfield of Huntertown was in a small RV storage lot near Goshen’s RV factories Thursday afternoon. He was scrambling to replace a flat tire on a travel trailer so he could get going and make some money hauling the RV to Pennsylvania. Bradfield and his fellow RV haulers are in high demand as the industry rebounds and has units waiting for dealers.

“If you are ready to pull, they are ready to go out,” Bradfield said.

He has about $50,000 invested in his large Chevrolet 3500 heavy duty pickup. He bought it used two years ago with 80,000 miles on it. The odometer has since pushed past 350,000 miles.

“It has picked up a lot,” he Bradfield said of the demand for haulers. “When I first started we were hauling three or four a week and were on a waiting list. Now as soon as we call we get one.”

The demand for RV haulers is just one of the tentacles of the RV industry reaching out to touch other areas of employment. Manufacturers of windows, doors, appliances, air conditioners, frames, trailer hitches, wiring harnesses, carpeting, cabinets, bath fixtures and more, all have a rise in business when the RV industry is moving units out the door.

Gaeddert said there are a few material shortages occurring in the RV supply chain right now as suppliers ramp up to meet production. He also said there is a need for many more RV haulers like Bradfield to get products to dealers. But those are good problems to have, he indicated

“Every problem you might hear pertaining to the RV industry, every one is due to growth,” he said.

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