Good news for Elkhart Indiana in September; RV shipments clicked up about 4% over September of 2018. However, despite this tick up, there is a lot of speculation on why the market has turned down about 17% this year. There is no one answer to this. The current RV trend is too complicated to blame on one thing alone.
New RVs for sale
I am not an economist, so the following are just my personal views. I am going to break my thoughts down into the following categories:
- 2017 – the boom year
- Quality vs. Quantity
- Service level expectations vs. reality
- Warranty
- Used Market and glut
2017 the boom year
Everyone who has been RVing for the past few years understands that 2017 was a remarkable year for the RV industry. Manufacturers could not keep up with dealer demand. RV Dealerships could not keep up with customer demand.
Just how strong were shipments in 2017? Well shipments were up over 18% when compared to 2016. The total number of units shipped in 2017 was 504,599. Any way you slice the data, that is a lot of units. In fact it’s about 5.6% of the total RVs on the road. I am basing that percentage on RVIAs data that states there are 9 million RVs on the road right now. That is pretty astounding. For Travel Trailer Fanatics, you will be interested to know that travel trailers were the number one selling unit and they made up 353,319 of that 504,599 number.
Just one brief caveat to the above numbers; shipments do not necessarily equate to sales. Regardless, it’s still pretty impressive.
In order to service the market place, the manufacturers increased their manufacturing levels and in some cases added more production facilities. Keep in mind, when this type of manufacturing boom takes place it is effecting more than just the manufacturing facility. It also affects the suppliers to that specific market. In other words Dometic, LCI, Suburban, Roof membrane manufacturers, etc.. all are under the gun to produce to the new levels set by the RV manufacturer.
Dealerships, knowing how tight the market is begin to pull ahead to protect themselves. At the same time the dealerships do whatever they can to keep pulling people in to buy new RV’s (Financing offers, huge discounts, attractive trade in values). This works for a while until there is a lull in the sales. Suddenly the Dealership has just too much new inventory and begins to shut the tap off. All of this has a ripple effect throughout the supply chain.
Quality vs Quantity
While all of this manufacturing is taking place it has become apparent that the quality control was not keeping pace with the shipments. Actually quality control is probably a very loose term for what goes on in the RV industry. One need only look at the multitude of issues with new or almost new trailers to realize something is wrong.
I am not a proponent of getting the government involved in any business, however, the RV industry really is ripe for some sort of government regulation. In short, if the RV industry was a member of your family, you would have already had an “Intervention”. In fact the RVIA is fighting hard to make sure this never happens. Click here to read more on that topic.
When trailers can be pushed out without decent quality standards, that is a problem. Increasing the production levels with what little inspection is taking place while at the same time incenting the workforce to make their numbers and you have serious issues. Relying on the Dealership to ready every trailer as it comes into their lot with defects is outrageous.
Even now, on social media, you have a large percentage of people who steer clear of the 2017 model year. In fact, due to the drop in quality, the used market is re-surging as well as the independent RV inspection business.
There is no doubt about it, quality still matters to the consumer. You don’t expect to buy a 45,000 dollar camper only to watch it sit in the repair facility as your warranty expires. If the fast food industry had a spike in sales and your favorite burger was pushed out of the kitchen so fast that it was raw, there would be real trouble. Consumers expect to get what they pay for, not some sort of a project. Consumers don’t want to hear “they are all that way” or “what do you expect, they fly down the road like they are in an earthquake”. It doesn’t need to be this way, and the consumer knows this.
Our experience has been that anything produced after 2008 had a greater chance for quality issues. Why? Prior to 2008 many independently owned companies existed and were required to compete based on quality. This was good for the consumer. After the 2008 crash and the gobbling up of nice RV companies into large conglomerates, the competition became much thinner. The quality in my opinion, is now at an all time low.
Service Level vs Expectations.
You can’t expotentially increase your product in the market place without the service organization to support it. That service organization isn’t just at the manufacturer, it also resides at the dealership.
The plain and simple truth is that there just are not enough service technicians in the RV industry to handle all the issues. The governments labor statistics show that there is one RV technician for every 750 RVs.
Obviously this is not just due to the increased production numbers but also the increase in the number of manufacturing failures. More and more RVers are struggling to get their RVs repaired at dealerships that really don’t know how to repair them. Many of these techs are not formally trained. That is a problem in and of itself. I speak from experience on this matter as I have had multiple dealings with multiple dealerships. One dealership told us that if they fixed the entrance door so that it operated correctly, it would cause more problems than it solved. One quick trip to an independent RV repair shop and the door was fixed in five minutes.
Folks new to the RV lifestyle have no idea what they are stepping into. Consumers expect that when a problem occurs with a purchase, that it will be fixed immediately and they will go on their merry way. That is not how this business model operates.
Typically, the consumer needs to take the RV in to have the failure confirmed. The RV may sit on the lot for weeks waiting for this step to take place. Then once confirmed, the dealership needs to get authorization to do the repair. Once the authorization takes place the parts are ordered. Once the parts arrive the RV gets staged into the repair schedule. This makes camping in a tent start to look pretty good.
The long and the short of it is that the service level in the RV industry is not meeting the customers expectations. It is a sad and repetitive story that you can read about each and every day on-line.
Warranty
Going hand in hand with Service, is the overall warranty of the RV. A good Warranty is great and so is a great manufacturing service organization but lets be honest, a warranty is something that no one wants to use. Make a quality RV and you really don’t need an enormous service organization. That’s not the world we currently live in though. As a result many consumers are buying extended warranty and need to leverage them. Unfortunately, many of the warranties are not all they are cracked up to be. Many are very selective about what they cover. In addition, many dealerships are not thrilled about performing warranty work, and may be ill equipped to perform it. There is nothing good about having to have warranty work done.
The Used Market and Glut
Lastly, where are all the old units going? They are not being towed to the RV Graveyard; they are also for sale on the dealers lot.
If 2017 was the largest boom for RV manufacturers with over 500,000 units shipped we need to assume that many of these consumers also traded an older unit. What does this mean moving forward to today?
It means that there is more of a selection of used RVs to pick from, thus decreasing the amount of new units needed. In fact, due to the quality issues mentioned above, there is a growing market for used RVs. Many consumers don’t want to roll the dice on a new RV when an older one wil meet their needs and not have a bunch of manfacturing flaws. A used unit has already been “broken in” and it is much less expensive than a new unit.
Remember what happened a few years ago with the automobile industry. Dealer incentives, employee pricing, zero percent interest, were just a few of the ways they encouraged consumers to pull ahead and buy their new vehicle early. Well, you can only do that for so long before your future purchases drop off.
Final Thoughts
In conclusion, the RV industry really needs to start addressing their manufacturing processes. I have no idea what percentage of consumers have deferred purchasing an RV due to the known issues around buying a new unit. Likewise I have no idea what percentage of consumers have decided to save some money and buy a nice used unit. However, in both cases I know this is happening.
Over manufacturing, poor repair records, a glut of used trailers, are probably just a few things that have caused a drop in shipments. With so many variables impacting the market; the current RV trend is too complicated to blame on one thing alone. However, the RV industry needs to be self critical and use this lull to straighten out their issues.
Let me be clear, I love my travel trailer, and it is a 2017 model. It has had more than its share of issues, some of them relatively major, all of them unnecessary. I would like nothing more than for the RV industry to thrive. It is a fantastic way to travel, especially with a growing family. Wouldn’t it be refreshing to buy a trailer and not have to worry about what was going to go wrong?
Current RV Trend is too complicated to blame on one thing.
Good news for Elkhart Indiana in September; RV shipments clicked up about 4% over September of 2018. However, despite this tick up, there is a lot of speculation on why the market has turned down about 17% this year. There is no one answer to this. The current RV trend is too complicated to blame on one thing alone.
New RVs for sale
I am not an economist, so the following are just my personal views. I am going to break my thoughts down into the following categories:
2017 the boom year
Everyone who has been RVing for the past few years understands that 2017 was a remarkable year for the RV industry. Manufacturers could not keep up with dealer demand. RV Dealerships could not keep up with customer demand.
Just how strong were shipments in 2017? Well shipments were up over 18% when compared to 2016. The total number of units shipped in 2017 was 504,599. Any way you slice the data, that is a lot of units. In fact it’s about 5.6% of the total RVs on the road. I am basing that percentage on RVIAs data that states there are 9 million RVs on the road right now. That is pretty astounding. For Travel Trailer Fanatics, you will be interested to know that travel trailers were the number one selling unit and they made up 353,319 of that 504,599 number.
Just one brief caveat to the above numbers; shipments do not necessarily equate to sales. Regardless, it’s still pretty impressive.
In order to service the market place, the manufacturers increased their manufacturing levels and in some cases added more production facilities. Keep in mind, when this type of manufacturing boom takes place it is effecting more than just the manufacturing facility. It also affects the suppliers to that specific market. In other words Dometic, LCI, Suburban, Roof membrane manufacturers, etc.. all are under the gun to produce to the new levels set by the RV manufacturer.
Dealerships, knowing how tight the market is begin to pull ahead to protect themselves. At the same time the dealerships do whatever they can to keep pulling people in to buy new RV’s (Financing offers, huge discounts, attractive trade in values). This works for a while until there is a lull in the sales. Suddenly the Dealership has just too much new inventory and begins to shut the tap off. All of this has a ripple effect throughout the supply chain.
Quality vs Quantity
While all of this manufacturing is taking place it has become apparent that the quality control was not keeping pace with the shipments. Actually quality control is probably a very loose term for what goes on in the RV industry. One need only look at the multitude of issues with new or almost new trailers to realize something is wrong.
I am not a proponent of getting the government involved in any business, however, the RV industry really is ripe for some sort of government regulation. In short, if the RV industry was a member of your family, you would have already had an “Intervention”. In fact the RVIA is fighting hard to make sure this never happens. Click here to read more on that topic.
When trailers can be pushed out without decent quality standards, that is a problem. Increasing the production levels with what little inspection is taking place while at the same time incenting the workforce to make their numbers and you have serious issues. Relying on the Dealership to ready every trailer as it comes into their lot with defects is outrageous.
Even now, on social media, you have a large percentage of people who steer clear of the 2017 model year. In fact, due to the drop in quality, the used market is re-surging as well as the independent RV inspection business.
There is no doubt about it, quality still matters to the consumer. You don’t expect to buy a 45,000 dollar camper only to watch it sit in the repair facility as your warranty expires. If the fast food industry had a spike in sales and your favorite burger was pushed out of the kitchen so fast that it was raw, there would be real trouble. Consumers expect to get what they pay for, not some sort of a project. Consumers don’t want to hear “they are all that way” or “what do you expect, they fly down the road like they are in an earthquake”. It doesn’t need to be this way, and the consumer knows this.
Our experience has been that anything produced after 2008 had a greater chance for quality issues. Why? Prior to 2008 many independently owned companies existed and were required to compete based on quality. This was good for the consumer. After the 2008 crash and the gobbling up of nice RV companies into large conglomerates, the competition became much thinner. The quality in my opinion, is now at an all time low.
Service Level vs Expectations.
You can’t expotentially increase your product in the market place without the service organization to support it. That service organization isn’t just at the manufacturer, it also resides at the dealership.
The plain and simple truth is that there just are not enough service technicians in the RV industry to handle all the issues. The governments labor statistics show that there is one RV technician for every 750 RVs.
Obviously this is not just due to the increased production numbers but also the increase in the number of manufacturing failures. More and more RVers are struggling to get their RVs repaired at dealerships that really don’t know how to repair them. Many of these techs are not formally trained. That is a problem in and of itself. I speak from experience on this matter as I have had multiple dealings with multiple dealerships. One dealership told us that if they fixed the entrance door so that it operated correctly, it would cause more problems than it solved. One quick trip to an independent RV repair shop and the door was fixed in five minutes.
Folks new to the RV lifestyle have no idea what they are stepping into. Consumers expect that when a problem occurs with a purchase, that it will be fixed immediately and they will go on their merry way. That is not how this business model operates.
Typically, the consumer needs to take the RV in to have the failure confirmed. The RV may sit on the lot for weeks waiting for this step to take place. Then once confirmed, the dealership needs to get authorization to do the repair. Once the authorization takes place the parts are ordered. Once the parts arrive the RV gets staged into the repair schedule. This makes camping in a tent start to look pretty good.
The long and the short of it is that the service level in the RV industry is not meeting the customers expectations. It is a sad and repetitive story that you can read about each and every day on-line.
Warranty
Going hand in hand with Service, is the overall warranty of the RV. A good Warranty is great and so is a great manufacturing service organization but lets be honest, a warranty is something that no one wants to use. Make a quality RV and you really don’t need an enormous service organization. That’s not the world we currently live in though. As a result many consumers are buying extended warranty and need to leverage them. Unfortunately, many of the warranties are not all they are cracked up to be. Many are very selective about what they cover. In addition, many dealerships are not thrilled about performing warranty work, and may be ill equipped to perform it. There is nothing good about having to have warranty work done.
The Used Market and Glut
Lastly, where are all the old units going? They are not being towed to the RV Graveyard; they are also for sale on the dealers lot.
If 2017 was the largest boom for RV manufacturers with over 500,000 units shipped we need to assume that many of these consumers also traded an older unit. What does this mean moving forward to today?
It means that there is more of a selection of used RVs to pick from, thus decreasing the amount of new units needed. In fact, due to the quality issues mentioned above, there is a growing market for used RVs. Many consumers don’t want to roll the dice on a new RV when an older one wil meet their needs and not have a bunch of manfacturing flaws. A used unit has already been “broken in” and it is much less expensive than a new unit.
Remember what happened a few years ago with the automobile industry. Dealer incentives, employee pricing, zero percent interest, were just a few of the ways they encouraged consumers to pull ahead and buy their new vehicle early. Well, you can only do that for so long before your future purchases drop off.
Final Thoughts
In conclusion, the RV industry really needs to start addressing their manufacturing processes. I have no idea what percentage of consumers have deferred purchasing an RV due to the known issues around buying a new unit. Likewise I have no idea what percentage of consumers have decided to save some money and buy a nice used unit. However, in both cases I know this is happening.
Over manufacturing, poor repair records, a glut of used trailers, are probably just a few things that have caused a drop in shipments. With so many variables impacting the market; the current RV trend is too complicated to blame on one thing alone. However, the RV industry needs to be self critical and use this lull to straighten out their issues.
Let me be clear, I love my travel trailer, and it is a 2017 model. It has had more than its share of issues, some of them relatively major, all of them unnecessary. I would like nothing more than for the RV industry to thrive. It is a fantastic way to travel, especially with a growing family. Wouldn’t it be refreshing to buy a trailer and not have to worry about what was going to go wrong?
john.martini.patterson@gmail.com
November 10, 2019
Blog, Industry Commentary
2017, industry commentary, rv market, rv trend, Travel Trailer, travel trailer blog, Travel Trailer Blogs, Travel Trailer Nation, travel trailer nation blog