RV Firms Turning Big Profits as Industry Rolls

Recreational vehicles these days can cost upwards from a half million dollars, and those featured on the Travel Channel’s “Big Time RV” tend to be the highest of the high-end. But the RV lifestyle is not just some quirky niche for retirees — it’s a market that continues to rebound from 2009 lows, which is a good thing for RV and RV components makers like Thor Industries Inc., Winnebago Industries Inc. and and Drew Industries Inc.

The Wealth Effect

In 2015, RV shipments from manufacturers to dealers hit their “best annual total since 2006,” according to the Recreation Vehicle Industry Association (RVIA). That’s a 4.9% year-over-year increase to 374,246 units, it said, including a 7.6% jump in motorhomes and a 4.5% rise in towables (think travel trailers and toy haulers that have to be hitched to the back of another vehicle).

Lower gas prices were the biggest factor contributing to last year’s pop in shipments, RVIA Western Show Director Tom Gaither told IBD. Lower interest rates and tame inflation also help.

“When gas goes up, people get scared of driving RVs, in terms of cost,” he said. But when prices are below $4 or so a gallon, “they like to go out and buy more trucks and buy more RVs.”

On the retail end — sales from distributors to RV owners — North American demand for towables and motorhomes rose 13% last year, wrote Baird analyst Craig Kennison in a March 8 note, citing Statistical Surveys Inc. data.

Article excerpted from RVBusiness.com.

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