Goshen News, Goshen, IN

December 5, 2013

Motorhome business once again flourishing

By ROGER SCHNEIDER roger.schneider@goshennews.com
Goshen News

---- — LOUISVILLE, Ky. — The iconic American vacation machine, the motorhome, is experiencing an uptick in popularity.

The Recreation Vehicle Industry Association tracks manufacturer shipments of motorhomes to dealers and reported this week that those shipments are up 36.2 percent compared to 2012. RVIA’s numbers show 28,198 motorized RVs were shipped in 2012 and 38,100 will be shipped by the end of this year. And the industry’s projections expect 41,900 motorhomes will be shipped in 2014.

“The last two years was the beginning of a recovery,” said Winnebago Industries Chief Executive Officer Randy Potts, who was busy greeting dealers at the company’s display at the National RV Trade Show. “The four years before that was a tremendous struggle.”

He said of the RVIA’s projection of growth in the motorhome segment, “I think it’s reasonable, but of course only time will tell. I think it is a safe estimation.”

Ninety-percent of Winnebago’s business is motorized RVs, and those are built in Iowa. The company builds its much smaller line of towable products in Middlebury.

Like the job growth Elkhart County has experienced from the comeback in the RV industry, the rising RV sales are benefiting the economy in Iowa. Winnebago is expanding its Class B van line by leasing a vacant factory in Lake Mills, Iowa. “We have promised to bring some jobs up there. We are going to assemble our B van products up there,” Potts said.

Those vans are currently being assembled in Charles City, Iowa.

“We just outgrew that,” Potts said. “Our product line is expanding and volume is picking up, so we needed more capacity and this opportunity came up. It is going to work out well for everybody.”

Any expansion in motorized products is a positive change after the recession drastically shrunk that segment of the RV industry. While towable recreational vehicle sales and shipments have picked up quickly and account for the bulk of the 300,000 plus units that will be made this year, motorized units have not bounced back as fast.

“The motorhome business is more closely aligned with the housing market and housing dropped off dramatically,” Potts said. “There was the whole crisis over the mortgage industry and all that. I think motorhomes got pulled into that. In the same note, as the housing market started to come back, so did the motorhome business.”

Larger motorhomes can qualify as a second residence for a lot of people, according to Potts.

Winnebago has a wide reach in the motorized RV segment, offering products in all lines, such as large Class A motorhomes, the smaller Class C motorhomes and the Class B vans.

“So we are a kind of soup to nuts (company),” Potts said.

“Hopefully it is a gradual recovery back to a normal market,” he said.

A normal motorized market would be 55,000 units shipped each year based on the 30-year average in the United States, according to Potts.

“There is still a lot of room for recovery. There is not a lot of used product out there right now because not much product went out for four years,” Potts said. “So I think there is a tremendous opportunity.”

Monaco’s Dynasty is back

The latest iteration of Monaco RV is reintroducing a classic residential motorhome. Allied Specialty Services purchased the Monaco business from Navistar last spring and moved production from Wakarusa to its Decatur, Ind. facilities.

Mike Snell, president of Monaco RV, spent the first two days of the trade show showing off the newest residential Monaco motorized unit, the 45-foot Dynasty. The luxury unit will retail for $620,000.

“This is a product we debuted in 1991 and through all the transitions we have had it has been out of the marketplace for five years,” Snell said. “So we have a lot of pent up demand for this. We just spent a lot of time having our owners help design this motorhome. “

Why bring back such an expensive product now?

“Because the high-end market seems to be really picking up,” Snell said. “If you look at after the recession, there was so much inventory that got reflushed through the pipeline it really hurt the value of coaches. Truly, our biggest competition was our own motorhomes. That now has stabilized and owners want brand new motorhomes. The demand is there.”

Newmar

Newmar in Nappanee also builds a line of luxury motorhomes and according to John Sammut, 2013 was a good year to be manufacturing such products.

Sammut is the vice president of sales and marketing for Newmar. “We certainly have seen growth throughout the 2013 calendar year,” Sammut said.

He said Newmar is outpacing the industry’s growth in motorhome sales and is growing its share of the segment.

“As expected, there is some pent up demand,” Sammut said. “Some existing motorhome owners have hung on to their motorhomes as a result of the recession longer than traditionally, so they extended their trade. They are coming to shows they are coming to dealer’s lots and are serious about trading in their current motorhomes and are going to the next step.”

Another trend is long-time motorhome owners who are aging and have been using 45-foot long units trading those in for smaller motorhomes.

“As far as 2014, unless any extraordinary economic conditions adversely affect the U.S. economy,” Sammut said, “I would look to see continued growth... in the Class A market throughout 2014. And we hope to be a part of that growth.”