By Len Souza, The RVer Advocate (03/09)
First lets look at how the RV market has grown for the past 10 years. In almost every year there has been impressive growth over the previous years. Wholesale shipments of all types of RVs reached the “peak” of 390,00 units in 2006. RV ownership has become one of Life’s Rewards and not just with Retirees but also with the, soon to retire, “Baby Boomers” plus the, following, “X” Generation.
Unfortunately in the last two years there has been a steady down turn in sales of RVs. Re- enforcing the reality that “nothing” grows forever, trends do correct and reverse themselves. We all know only too well what happened: Two years ago, fuel prices started rising and in June of 2008 consumers in the west were paying over $4.50 per gal for gas and over $4.75 for diesel fuel. These increased costs had a “dampening” effect on RV travels AND on RV sales. After all, RVs only achieve 6 or 7 miles per gallon on a “level” highway—these higher pump prices were alarming to everyone. This led most owners to limit their trips as to frequency and distance traveled. And then there are the issues of our nation’s Oil Energy dependence, the Global Warming cry, the perceived need to drive vehicles that get at least 35 mpg and the feeling by some that it is darn near “Un American” to own and operate “Fuel Hog” vehicles of any type. All of this has negatively impacted the RV world.
Our nation’s financial downturn or “Spiral” has certainly added, greatly, to the woes of everyone connected with Recreational Vehicles and their use. Eight factories have closed down since last May and in the last 2 weeks, three of the biggest names in RV manufacturing have shut down and they have filed for bankruptcy under Chapter 11. (These companies are: Fleetwood Enterprises, Monaco Coach and Country Coach.) There doesn’t seem to be an end to this pattern, as more manufacturers are probably going to fail and shut down in the coming months. Also over 100 dealer locations have closed across the nation, with more to come. This has left many unsold RVs in dealer inventories, AND most seriously, it has left thousands of RV owners with out a factory to back-up the service of their RVs, “In or Out” of Warranty. And of course this situation has cost, thousands of men and women, their jobs and livelihood. Also, the resale value of the “Orphaned” motor homes and trailers has seriously plummeted—even beyond the normal steep depreciation that is normally associated with all RVs.
The financial downturn that we are experiencing is very serious and it has directly impacted the whole RV industry, from top to bottom. Total RV sales are currently at a level that is around “half” of what they were during the “Peak” year of 2006. In that year, over 390,000 wholesale units, of all types of RVs, were shipped. How did we get into this mess? The experts in Washington DC say that: We all over extended our consumer credit (borrowing) --in buying everything from houses, cars, RVs, entertainment and “toys” in general. The price of residential housing had gone up and out of sight. Many bad, Sub Prime Loans were used to buy these over priced houses. The housing market prices have now crashed; this alone has undoubtedly had a Major Impact on RV sales…. due to the fact that many of us have used the “equity build-up” in our residences--to buy RVs at one time or another. And how about the stock market collapse? Many of us no longer have “401 Ks”; we now have “201 Ks”. The Banking Systems are in “Intensive Care” and RV factories are struggling for the lack of Loan-funds to run their businesses. Dealers find it almost impossible to arrange for financing (flooring) for their sales inventories. And then you have the RV buyers: Whose homes have probably dropped 30 or 40 % in market value, their stocks and bonds have plummeted, plus they may be losing their own jobs as employees or their small businesses may be failing. Given that an RV is a “discretionary” purchase, one can understand that with all of these negative conditions that exist at this time, people are not rushing out to buy NEW or USED RVs at this time.
I feel confident that our nation’s Banks, Financial Institutions and the Stock Market will recover---if we retain our Capitalist System and the Free Enterprise model. Here is how I think this all going to play out.
I believe in RVing, it has produced “more bang for the buck” for my family than anything else. It may not be for everyone, however for a large number of people---if they try it, they will become “Happy Campers”. It is all about Freedom to Go, See, Meet People and enjoy our magnificent Country.
Ed Note: Len Souza has owned RVs for 30 years. He is a graduate Engineer (BSEE). He is retired and lives with his wife of 53 years in Hemet, California, Riverside County. He is a Consumer Affairs Advisor for Motor Homes on this web site. If you have comments or questions E Mail him at: mbpete@verizon.net