RV Sales Surge Despite High Fuel Prices

LOUISVILLE, Ky. December 2, 2004; Bruce Schreiner writing for the AP reported that stubbornly high fuel prices haven't slowed the $12 billion-a-year recreational vehicle industry, on course to reach record high revenues for a second straight year.

Industry executives credit the buying surge to low interest rates and baby boomers with enough disposable income to snatch up RVs ranging from pop-up trailers to massive motor homes with gourmet kitchens, fireplaces and flat-screen TVs.

``I have never seen a time with so many optimistic signs'' for the industry, said Bruce Hertzke, CEO and president of Winnebago Industries Inc., attending the industry's annual trade show this week at the Kentucky fairgrounds.

According to industry figures, RV retail sales were up 11 percent during the first nine months of 2004 compared to a year ago.

Wholesale RV shipments this year are projected to reach 364,900 units, up nearly 14 percent from a year ago and on pace to set a 25-year record, according to Richard Curtin, director of consumer surveys at the University of Michigan. The brisk pace continued in the third quarter when RV shipments totaled 93,300 units, the highest figure for the July-September period in the past 25 years.

Jim Walters, president of San Diego-based La Mesa RV, said he expects a record-breaking year with projected sales reaching $700 million, up 40 percent from last year. Orders for 2005 are up 20 percent from a year ago, he said.

``We do a lot of business in the wintertime in our `snowbird' markets, so we've already put our orders in with the manufacturers,'' Walters said.

Towable RVs that are hitched to vehicles account for about three-quarters of all RV sales, with motor homes making up the remainder.

The RV industry has cultivated the demand with a $50 million advertising campaign aimed especially at baby boomers.

``Americans want freedom, they want flexibility and they want to have fun,'' said Claire Skinner, chairman and CEO of Coachmen Industries Inc., a maker of RVs and modular homes. ``They care about experiencing life to its fullest, and RVs let them do that.''

Skinner said high fuel prices haven't been a drag on RV sales. Despite the price spike, driving even the largest motor homes still makes a trip less expensive than staying in a motel and eating out, she said.

The latest surge in RV sales followed the terrorist attacks of Sept. 11, 2001, which changed travel and vacation habits for many Americans.

``No one wants to be a beneficiary of that terrible tragedy,'' Skinner said. ``That said, I do believe that the RV industry was an unwitting beneficiary.''

Winnebago, headquartered in Forest City, Iowa, ended its fiscal year in August with a record 42 percent increase in net income over the previous year.

Coachmen, based in Elkhart, Ind., posted a 119 percent increase in net income during the year's first nine months.

Skinner said she expects continued growth for the industry. One positive sign is the number of couples with young children who are buying RVs. Many of those families will trade up for bigger models as the years go on, and the children will become potential consumers once they reach adulthood.

``What that shows is that the industry is going to renew itself,'' she said.