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The latest retail sales data suggests Californians temporarily postponed purchases of Class A motorhomes in October because the state license fee was tripled, according to Tom Walworth, president of Statistical Surveys Inc., an independent market research firm.
The fee has since been rolled-back,
Earlier this week, Statistical Surveys reported retail sales of Class A’s declined 6.2% nationwide in October, a surprising outcome because, as Walworth said, “The market is not soft.”
Additionally, retail sales of Class A’s declined 10.8% in October in California, the nation’s largest motorhome market, to 504 units, compared with 565 in October 2002, Statistical Surveys reports. That represents a radical departure from the 12.5% increase in retail sales of Class A’s in California when the first 10 months of this year are compared with the same portion of 2002. There were 5,850 Class A’s retailed in California in the first 10 months of this year versus 5,199 in the first 10 months of last year.
The decline in retail sales was spread evenly among the manufacturers of Class A’s, which gives weight to the argument that California residents delayed their purchases.
The decline in Class A retail sales nationwide in October also seems peculiar given the fact that Class A retail was up 6.9% nationally when the first 10 months of this year are compared with the same portion of 2002.
Ernie Friesen, principal of All Seasons RV Center in Yuba City, Calif., and chairman of the California Recreation Dealers Association (CalRVDA) Government Relations Committee, has an explanation: California residents temporarily postponed purchases of Class A’s because former Gov. Gray Davis enacted the fee increase and the state’s residents assumed he would be defeated and the fee increase would be rolled-back.
Davis was defeated in the recall election on Oct. 7 by Arnold Schwarzenegger, who rolled back the fee to its pre-Oct. 1 level a few hours after he was sworn in on Nov. 17.
Consequently, the November Class A retail sales figures for California may reveal a sharp increase because of pent-up demand that developed in October, Walworth said.
The tripling of the state’s Department of Motor Vehicles fee, from 0.65% to 2%, had a dramatic impact on RV prices, Friesen added. For example, in the case of a $200,000 diesel pusher, the DMV fee soared to $4,000 from $1,300.
Schwarzenegger rolled the DMV fee back to 0.65%.
The higher fee did not impact Class C motorhomes sales in October, Walworth said. Class C retail sales were up in October in California and nationwide and they are up when the first 10 months of this year are compared with the same portion of last year.