RV towable sales slowing?
Dealer Poll: New Towable Inventories Too High
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December 29, 2018 by RVBusiness Leave a Comment
Editor’s Note: The following report by Recreation Vehicle Dealers Association (RVDA) Director of Industry Relations Jeff Kurowski, appearing in the December issue of RV Executive Today, breaks down results from a recent Baird dealer sentiment survey.
Dealers surveyed late in October said their new towable RV inventories were too high, while their used towable inventories were balanced, according to Robert W. Baird & Co., the Milwaukee-based investment firm that surveys dealers quarterly in partnership with RVDA.
The Baird firm feels dealers’ belief that their towable inventories were too large was fueled by the desire they have each year to reduce inventories during the fourth quarter. Higher interest rates also were a factor. As one dealer wrote, “There is too much inventory on dealers’ lots. We have to get better inventory turns to make money, as our profits have been interest rates, we can’t afford to stock what we once did.”
Another dealer added, “I’m hoping the industry is just catching its breath after some very strong years. I still expect 2019 to be very good – consumer confidence is high and the local economy strong – all should offset higher costs and interest rates.”
Dealers surveyed in late October said they had a 120-day supply of towables, compared with 114 days in late July and 114 days in October 2017.
Commenting on retail demand for towables during the August through October period, one dealer wrote, “I’m not sure what happened this fall; it started to slow in August and never re-gained momentum.” Another said, “I had a record August- October last year, but this year was about the same as 2016, so it was a bit disappointing.”
Tet another dealer reported his towable unit volume is up 7 percent, but his gross sales revenue is up only 4 percent, due to a shift in the product mix to smaller and lower- priced trailers. Another dealer said, “We continue to see weakness in stick and tin. Margins are stressed. The selling point that works is under $20,000, but the unit needs to be 28 to 30 feet. We are dumping at any cost; the gap between fiberglass walls and stick and tin is closer than in the past. Customers are comparing floor plans more than exteriors or unit class.”
In the motorized sector, dealers estimated their days supply was 119 days as of late October, which was lower than 127 days in late July and 129 days as of October 2017. But one motorhome dealer reported that “higher interest rates are negatively effecting overall business and are the reason for flat sales for new units and a big increase in sales of used.”
Another dealer said that Class As are “questionable in our market today, but Class Cs are still doing well.” Yet another reported, “The price point is changing – we’re selling more gas to diesel and seeing a good turn on diesel Class Bs when we can get them.”
Print Print
December 29, 2018 by RVBusiness Leave a Comment
Editor’s Note: The following report by Recreation Vehicle Dealers Association (RVDA) Director of Industry Relations Jeff Kurowski, appearing in the December issue of RV Executive Today, breaks down results from a recent Baird dealer sentiment survey.
Dealers surveyed late in October said their new towable RV inventories were too high, while their used towable inventories were balanced, according to Robert W. Baird & Co., the Milwaukee-based investment firm that surveys dealers quarterly in partnership with RVDA.
The Baird firm feels dealers’ belief that their towable inventories were too large was fueled by the desire they have each year to reduce inventories during the fourth quarter. Higher interest rates also were a factor. As one dealer wrote, “There is too much inventory on dealers’ lots. We have to get better inventory turns to make money, as our profits have been interest rates, we can’t afford to stock what we once did.”
Another dealer added, “I’m hoping the industry is just catching its breath after some very strong years. I still expect 2019 to be very good – consumer confidence is high and the local economy strong – all should offset higher costs and interest rates.”
Dealers surveyed in late October said they had a 120-day supply of towables, compared with 114 days in late July and 114 days in October 2017.
Commenting on retail demand for towables during the August through October period, one dealer wrote, “I’m not sure what happened this fall; it started to slow in August and never re-gained momentum.” Another said, “I had a record August- October last year, but this year was about the same as 2016, so it was a bit disappointing.”
Tet another dealer reported his towable unit volume is up 7 percent, but his gross sales revenue is up only 4 percent, due to a shift in the product mix to smaller and lower- priced trailers. Another dealer said, “We continue to see weakness in stick and tin. Margins are stressed. The selling point that works is under $20,000, but the unit needs to be 28 to 30 feet. We are dumping at any cost; the gap between fiberglass walls and stick and tin is closer than in the past. Customers are comparing floor plans more than exteriors or unit class.”
In the motorized sector, dealers estimated their days supply was 119 days as of late October, which was lower than 127 days in late July and 129 days as of October 2017. But one motorhome dealer reported that “higher interest rates are negatively effecting overall business and are the reason for flat sales for new units and a big increase in sales of used.”
Another dealer said that Class As are “questionable in our market today, but Class Cs are still doing well.” Yet another reported, “The price point is changing – we’re selling more gas to diesel and seeing a good turn on diesel Class Bs when we can get them.”
