The Wall Street firm Robert W. Baird & Co. implies in an analysis for investors of this week’s wholesale shipment report from the Recreation Vehicle Industry Association that the industry is at or near a valley and should begin to rebound.
Total shipments fell 22% in July with weakness continuing in motorhomes as dealers reduce inventories, Baird noted. Motorhomes were down 47% while towables were down just 19%. “Fundamentals remain weak, but we continue to see potential for mild recovery as comps ease, consumer confidence improves and dealers replenish inventory at more normal rates,” the firm reported.
It concluded, “Shipments remain below retail sales as dealers continue to destock inventory. We believe this is an unsustainable trend and expect dealers to begin to replenish inventory at a one-to-one ratio. Recently Thor reported an increase in its backlog, suggesting dealers are beginning to reorder at a more normal rate.”
Baird calculated the seasonally adjusted annual rate (SAAR) of shipments for Class A and Class C motorhomes increased to 12,700 units in July, up from 11,400 units in June. The SAAR of towable shipments fell to 136,600 units in July from 143,800 units in June.
The RVIA, in reporting July shipments, calculated the SAAR for its member at 171,000 units. Baird does not include folding camping trailers, truck covers or Class B motorhomes in making its calculations. These refined classifications provide better comparisons to the companies it covers, the investment firm explained.