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Robert W. Baird & Co., a Milwaukee, Wis.-based investment firm that regularly tracks the recreational vehicle industry, recently released findings from a survey of 109 dealers designed to gauge dealer sentiment, retail trends, inventory levels and promotional activity in the fourth quarter of 2006.
Results of the company’s “January RV Dealer Survey” showed:
• Market demand: Motorhome demand improved due to easy comparisons in the fourth quarter of 2005, while towable demand fell against tougher hurricane-driven comparisons.
• Dealer optimism: Dealers were surprisingly buoyant about 2007, becoming even more optimistic since October. In fact, 53% were optimistic (17% pessimistic), with some citing lower gas prices, a higher stock market and steady interest rates as drivers.
• Towable expectations: There were concerns that the towable slowdown that began in June could mimic the motorhome slowdown, which lasted 20 months. Most dealers are not concerned, however, as 60% expect the slowdown to end by April.
• Inventory levels: Dealers reported lower motorhome inventory and higher towable inventory versus last year – partly because dealers are stocking what turns. Many dealers took advantage of manufacturer incentives and built inventory.
• Sentiment. Dealer Sentiment Index was flat versus Baird’s survey in October, inching up one point to 47 (0-100 scale).
• Summary: Dealers are surprisingly optimistic, but off-season trends can be misleading. Economic drivers are mixed, as the recent fall in gas prices has been offset by higher interest rates.