RV industry on slow road to recovery in 2011

The recession-dented RV industry pointed Tuesday to modest gains atop last year's turnaround performance as another sign that the sector is on a slow road to recovery.

RV makers, dealers and suppliers attending an annual industry trade show in Louisville were told that 2011 shipments from manufacturers to dealers are expected to be up 2 percent from last year's 242,300 shipped units. The 2010 total amounted to a 46-percent gain from 2009 as the economy improved.

The improvement is good news for Indiana, where more than three-quarters of RVs are manufactured.

"You guys sitting in this room today are all survivors in this industry, and I think that bodes very well," said Richard A. Coon, president of the Virginia-based Recreation Vehicle Industry Association.

In 2007, shipments of RV units totaled 353,400 — the fourth-highest figure in a quarter century. By 2009, shipments slumped to 165,700 units as older RVs parked on dealers' lots drew scant interest from cash-conscious consumers.

Consumers remain jittery because of stubbornly high unemployment, sagging home values and a volatile stock market. As a result, the industry is bracing for a projected 2.6-percent decline in RV shipments in 2012 to 240,600 units, based on a forecast by University of Michigan economist Richard Curtin.

"It plays with the psyche of those people that are in our target market," said Bob Olson, chairman of RV maker Winnebago Industries Inc.

Lackluster consumer confidence aside, he noted some favorable trends: dealer inventories have improved and consumer credit has become more available, especially for less-expensive towable RVs attached to pickups or hitched to the back of another vehicle.

"A lot of tough decisions were made by everybody in that room in order to be here today," Olson said following the trade show's opening session. "You didn't find anybody in the RV industry getting a bailout. We did it the old-fashioned way, with some pretty tough decisions."

Since 2008, the number of RV manufacturers has dropped by 35 percent, Coon said. The ranks of suppliers fell by almost the same amount.

Everyone had to make adjustments to survive.

Tom Stinnett, an RV dealer in southern Indiana, said he reshuffled his inventory to focus mostly on towable units. Before the recession, his lot was divided between towables and more costly stand-alone motor homes.

Towables cost between $6,000 and $100,000, according to RVIA. Stand-alone motor homes range from $50,000 to as much as $400,000 for top-of-the-line, bus-like vehicles.

Stinnett said his business is profitable again after several tough years, adding "We have nowhere to go but up."

U.S. Interior Secretary Ken Salazar also gave a pep talk to the industry.

"Your best days are still ahead," he said before touring a convention hall filled with the newest models.

Salazar said investments in conservation and outdoor recreation would help fuel job growth. He cited a study showing more than 8.4 million U.S. jobs are created every year thanks to outdoor recreation.

In 2010, RV travelers spent nearly 2.3 million nights at national parks, up 10 percent from 2008, Salazar said.

Employment is also on the rebound in the industry. RV manufacturers and suppliers now employ about 375,000 people, up about 50 percent since November 2008, according to RVIA. But the overall work force is still down from the more than 500,000 workers before the recession.

Among the RV makers showing off their latest models was California-based manufacturer MVP RV Inc., which debuted an all-electric motor home powered by batteries attached to the chaise.

  "It's a bold step for us, but we believe that these are the kind of actions that are necessary to help change the perception of not only the industry but the economic climate overall," said MVP CEO and President Brad Williams