The sky is falling!

[ToddF]

Article in this mornings WSJ citing declining RV sales...

https://www.wsj.com/articles/one-countys-rv-industry-points-to-recession-around-the-bend-11566207001?shareToken=staf650b0e33f1463e8a38cfe7ada4cfbc

I'm in the camp (pardon the pun) that RV sales have boomed and were bound to settle down. Yes, they're down, but from what numbers? 

No regrets on buying new in '16. I was well aware that this monster would be a "depreciating asset" as many of the comments suggest. I didn't buy it to make money or build my 401K.

Leaving on a 4 month trip on Sept 3 and looking forward to getting a lot of use out of my TT zone pass with trails collection! Bookings for this Fall season have gone well as usual, now that the kiddies are back in school, I don't think the parks are as busy based on past trips. Orlando confirmed for 14 days checking in Oct 16. 

Trip to start in MN and head out East to the Poconos, Jersey Shore, Lancaster area then down to Orlando and then move West to Phoenix area. (Plan to stay in the Gulf Shores area for a week at the state park, a week at Rainbow Plantation in Summerdale then over to San Antonio at Travelers world.)

 

 

 

[richfaa]

Would not know that by the RV's awaiting transport in the Elkhart, Goshen,ind area. Was there just last week and the lots are overflowing. The RV industry is however among the first to feel a economic downturn.

 

[docj]

1 minute ago, richfaa said:

Would not know that by the RV's awaiting transport in the Elkhart, Goshen,ind area. Was there just last week and the lots are overflowing. The RV industry is however among the first to feel a economic downturn.

 

Historically, RVIA shipments to dealers have tended to outpace sales. Just because RVs re sitting on lots awaiting shipment doesn't mean there's anyone at the other end waiting to buy them.  At least for awhile a manufacturer can show product going out the door in excess of what its dealers can sell.  In the '08 recession one of our then local dealers was sitting on several MH's that were 3-4 years old but which had never been sold.

[Lou Schneider]

I liked the video at the end of the article showing the $625k Tiffin the guy uses for tailgate parties, including having someone else drive it to and from the games.

[richfaa]

1 hour ago, docj said:

Historically, RVIA shipments to dealers have tended to outpace sales. Just because RVs re sitting on lots awaiting shipment doesn't mean there's anyone at the other end waiting to buy them.  At least for awhile a manufacturer can show product going out the door in excess of what its dealers can sell.  In the '08 recession one of our then local dealers was sitting on several MH's that were 3-4 years old but which had never been sold.

We agree with that actually the manufacturer would rather have them SItting at the dealers lot than in a manufacturer's lot. We drove the turnpikes to Nebraska for a rally and the transport traffic was  heavy. In the 08 recession  the Elkhart area was a ghost town. I recall all of  the montana products being built in one plant.

[2gypsies]

2 hours ago, Lou Schneider said:

I liked the video at the end of the article showing the $625k Tiffin the guy uses for tailgate parties, including having someone else drive it to and from the games.

The Auburn/Alabama games are a VERY BIG thing in Alabama.  You wouldn't believe the rigs you see. They have someone drive them there  for partying and they stay in a nearby hotel!!!

[sandsys]

7 hours ago, ToddF said:

Leaving on a 4 month trip on Sept 3

Returning to Minnesota in January?!!!  Other than that, it sounds like a good trip.

Linda

[ToddF]

I don't think my tax clients would be too happy if I didn't show up for tax season. 😨

[SnowGypsy]

I wouldn't pay too much attention to The Wall Street Journal on this.  There are more manufacturers popping up around the country, even some of those in Elkhart have facilities elsewhere in the country, and at only 65%, which I am sure was much higher in the past, maybe it has more to do with what they producing in Elkhart than the economy or tariffs.    I think the quality has become poor with many of the units and many hesitate to buy for that reason.  A lot of barely used units are on the market with good prices based on the supply being so high.  

I'm not going to lose any sleep over it.  I think all too often looking back at the past to make predictions doesn't really work as things have changed so much.  

[D&J]

Eventually the market had to get saturated with units, I've looked at some of the new stuff out there and I will stay with my 16 year old HitchHicker. 

Denny 

[richfaa]

The RV industry is a really good indicator  of were the economy is heading. Rv's are a luxury item and luxury items are the first  to feel  the effects of a slowing economy. We will be in the Elkhart area for a RV rally  in 3 weeks and will be able to see what the economy is like there.

[2gypsies]

We'd have a very hard time buying a new RV at this time.  There is too much technology installed and too much to go wrong.  Also, for motorhomes there are too many slides and bathrooms.  Too much glitz!  The prices are unbelieveable.  Our last one, '04 Newmar Dutch Star, had none of this and we specifically found a floorplan with only two slides.  We boondocked and dry camped and didn't want to have to deal with maneuvering slides on both sides between trees.  I guess people want all this stuff but we sure wouldn't.

[D&J]

57 minutes ago, richfaa said:

The RV industry is a really good indicator  of were the economy is heading. Rv's are a luxury item and luxury items are the first  to feel  the effects of a slowing economy. We will be in the Elkhart area for a RV rally  in 3 weeks and will be able to see what the economy is like there.

I will disgree with you because I believe the production of poor quality high priced units is catching up with them. 

Denny 

[pjstough]

22 minutes ago, D&J said:

I will disgree with you because I believe the production of poor quality high priced units is catching up with them. 

Denny 

So you believe that there are significant numbers of people who want to buy RVs, but because of the quality issue, they simply are holding onto their money and not buying?

[Ray,IN]

I ignore this stuff, there is absolutely nothing I can personally do sway the economy. If I have no effect on it, why waste my time and risk my health worrying?

[Kirk W]

3 hours ago, SnowGypsy said:

I wouldn't pay too much attention to The Wall Street Journal on this. 

Wondering who you do consider knowledgable on the subject? As one who has read the "Journal" frequently for many years, the people who they publish have a pretty good track record. In addition, she quotes a few people who are very well known in economics and she does not predict any massive decline in the economy but does point out some early warning signs. There have always been some manufacturers who cut corners to make more money and others who build quality products and that will likely always be true. What is there that has not seen major price increases over the past 10 years or longer? Check out what car and truck prices have done over that same period. If you Google the economy slowing you will get a long list of articles that make similar predictions based on completely different signs. Most predict a slowing but not a recession, which is true of this article as well. Some of the articles come from highly respected sources.

[D&J]

2 hours ago, pjstough said:

So you believe that there are significant numbers of people who want to buy RVs, but because of the quality issue, they simply are holding onto their money and not buying?

People are just getting turned off because of all the junk.

 

Denny 

[richfaa]

The quality of RV's has not changed in years.It would make no sense for RV manufacturers to  turn out junk. Wife and I worked the big RV show in Cleveland, Ohio for a few years. The vast majority of buyers have no clue  about quality or how to look for it.  they just want to know what the monthly payment are and will my truck pull it.

 

[SnowGypsy]

The quality of RVs has most certainly changed, and the better units aren't being made in Elkhart, IN.   I am from that area originally.

Who do I trust?  Well, no one in the media as they simply try to sway people to their way of thinking.  I don't care for the WSJ anyway and feel many are "jumping on the bandwagon" - I was very active during 2016 watching media outlets and formed an opinion of them.  Experts in the field, hey I just researched wind farms, and experts can't be trusted either.   I also don't think we ever recovered from the last recession, just good fleecing by the media.

An RV isn't a luxury item anymore.  Pop-ups can be bought for a payment of about $99 a month and just about everyone can get credit to buy one, even those that shouldn't.

RV industry is running into what economics calls "price exceeds value".  A lot of people are converting cargo trailers into exceptional RVs and showing everyone else how to do it on YouTube.

The media has to have something to report, and without war or famine, they are just shaking the bushes for something to fill the space.   

[pjstough]

1 hour ago, D&J said:

People are just getting turned off because of all the junk.

 

Denny 

So just to confirm, you believe that there are a significant number of people wanting to buy RVs, but arent because of the quality of new RVs?

 

[richfaa]

I never thought of Pop ups as a luxury RV, and I got it d o not trust anyone particularly if they do not  agree with you/

[SnowGypsy]

Another article concerning the "slump":  https://www.barrons.com/articles/rv-industry-slump-inventory-elkhart-recession-economy-thor-winnebago-51566240571  Some are thinking that the slump will disappear in 2020.  https://axleaddict.com/rvs/Why-RV-Sales-Are-Falling-and-What-This-Means-for-You  an article that said a slump started Aug/Sep 2018, so blaming tariffs which started in July 6, 2018 on the slump really doesn't pan out, but it looks like they will try to blame them for further increases in their production costs thus sticker prices, but wouldn't it be nice to have that RV with American made parts, maybe they wouldn't fall apart as quickly.  The RV industry is up and down, up and down, up and down and has always been that way.  

I didn't say a pop-up was a luxury RV, but that RVs were not necessarily a luxury item.  Even TTs and 5th wheels can have payments of less than $300, easily affordable to many families.  What one considers a luxury item often has to do with their budget is to begin with.

 

[Kirk W]

7 minutes ago, richfaa said:

I never thought of Pop ups as a luxury RV,

For most people, any RV is a luxury item as it is easily done without. When an RV happens to be at the low end of the price structure it simply meas that it costs less but it remains a luxury item. From Market Business News:

Quote

Luxuries or luxury goods or services, are things that are not essential, but which we believe make life more pleasant.

Luxuries have a high elasticity of demand – they are more sensitive to changes in the economic environment than other products and services. When their prices or people’s incomes change, demand for luxuries moves up or down to a greater degree.

 

[$ Spot]

6 hours ago, richfaa said:

The RV industry is a really good indicator  of were the economy is heading. Rv's are a luxury item and luxury items are the first  to feel  the effects of a slowing economy. We will be in the Elkhart area for a RV rally  in 3 weeks and will be able to see what the economy is like there.

I'm interested on what you could report after the rally

2 hours ago, richfaa said:

 Wife and I worked the big RV show in Cleveland, Ohio for a few years. The vast majority of buyers have no clue  about quality or how to look for it.  they just want to know what the monthly payment are and will my truck pull it.

Overhearing conversations at shows as we walk by folks validates this, and in my mind I wish them well as I battle the urge to butt in and share some truths

3 hours ago, D&J said:

People are just getting turned off because of all the junk. Denny 

1 hour ago, pjstough said:

So just to confirm, you believe that there are a significant number of people wanting to buy RVs, but arent because of the quality of new RVs?

From what I read on forums folks are seeking used RVs with the thought that new ones are junk. I've seen the year 2014 given as the point of downslide. The issues with the RVs may also have been handled with a used unit and this could also be a plus for the used market in their eyes as well. I read of a reluctance to enter the crapshoot in getting a new RV. What isn't helping matters is the friction between manufacturer and dealer regarding repairs that we often hear about. If I'm in an area and looking for something to do, sometimes I'll venture in to a dealership just to browse and many times get in to a conversation on that matter. This struggle flows downhill to the consumer inevitably, even as some dealers try their best to have a happy customer. After all, reputation and referrals go a long way in running a business.

     Spot

     

[Kirk W]

11 hours ago, $ Spot said:

From what I read on forums folks are seeking used RVs with the thought that new ones are junk.

Interesting view. If that is true, who is buying the new RVs, since sales has been up through 2018? I have owned RVs since 1972 and have followed the industry closely for a long time and really don't see that much difference today. RVs have become far more complex and much larger over the years so there is far more in them to have potential problems. One of the major issues in quality comes from the fact that the typical buyer shops mostly based on superficial appearance & price with little interest in paying more to get quality. The history of the RV industry over the past 40 years that I have followed it, is littered with failed RV builders who tried to maintain high quality standards but could not successfully sell against the lower piced RVs of much less quality. The reason the RV industry does not spend the money required to have good quality control in their factories is that doing so would price them too much higher than the products from others who don't do that and the typical buyer would not buy from them. If you take a look at companies like Marathon, Newell, & Prevost, all of them are thriving because they sell to people who are willing to pay whatever it costs to get the best. 

Most of us in the RV community talk about quality in the industry but continue to buy based mostly on price.