Avondale Partners LLC released the results of its survey last week of nearly 100 RV dealers to assess dealer sentiment and current industry conditions. A summary of the Wall Street firm’s third-quarter findings follows:

  • Sales trends improve vs. prior survey. Our analysis indicates an improvement in trends from our Q2 ’08 survey. While July retail sales data from Statistical Surveys Inc. continued to indicate significant weakness in retail sales levels (motorhomes down 51.9% and towables down 27.2%), we have been hearing of modest improvements at the dealer level since gas prices have come down. Importantly, wholesale shipments continue to be weak (down 38.7% year-over-year in July alone), as dealers simply are not reordering units.
  • Looking further to lower inventories. While a greater portion of Class A and Class C inventories were indicated as being low (58.2% and 52.6%, respectively) vs. last survey’s 43.9% (Class A) and 47.8% (Class C), dealers continue to look to lower inventory levels. 68.9% of respondents indicated plans to lower inventory levels, consistent with Q2’08’s 68.1%.
  • Recovery hopes tempered by prolonged economic downturn. Dealers cling to the hope of a RV industry recovery after the U.S presidential election, but don’t see any meaningful recovery for at least a year. The further death spiral of the U.S. economy has tempered RV dealer expectations.
  • Traffic trends somewhat a function of gas prices. Given the feedback we had been hearing regarding improvement dealer level sales trends, we asked dealers to characterize sales trends since the end of July. Results are fairly mixed with nearly one-third of respondents indicating “Up” sales trends and 39.1% indicating “Down” sales trends.
    Avondale concluded, “RV retail trends turned sharply negative this spring, and retail trends largely have remained unchanged. Breaking the $4 per gallon barrier provided a respite for certain RV dealers, but the overall crushing realities of very challenging financing and dismal consumer confidence weighs on RV sales trends. While inventories have improved as the year has progressed, dealers are looking further to reduce inventories. We have seen two RV manufacturers go out of business since July (Weekend Warrior Trailers Inc.) and Pilgrim International Inc.), and we expect additional manufacturer closures as the season ticks to a close and cash dries up. While it is difficult to precisely track closures of smaller RV dealers, there have been consistent headlines of closures at several significant dealers. “