Fleetwood’s motorhome business appears to be on the mend but its travel trailer and fifth-wheels sales have lagged behind the industry for several months.
But Fleetwood now has turned its attention toward improving its towables products, according to David Engelman, interim president and CEO.
“Much of our early focus has been on our Class A motorhomes and the response to the new and refreshed products has been terrific,” Engelman said during a conference call with investment analysts last week. “We have good reason to feel positively that similar efforts now being directed towards our travel trailer products will also gain traction in the next couple of quarters.”
Engelman did not go into further details, but he added that he believes many of the problems experienced by Fleetwood’s RV Group “were self-inflicted. In recent years past, we followed the ‘if it ain’t broke, don’t fix it’ mentality well past the time that we should have. We have worked diligently the past nine months to get back in front and where our efforts have had time to be tested, they’ve proven in the market place to be successful.
“We continue to be very optimistic about Fleetwood’s long-term future,” Engelman continued. “The company is fundamentally stronger today than it was a year ago. We make quality products with an emphasis on value and they are products that, by all indications, will continue to be in demand.
“We are confident the sources of our past problems have been identified and corrective action taken in the areas that we can control,” Engelman said. “We believe that most of the restructuring and right-sizing costs are behind us, assuming sales volumes remain relatively steady. We continue to carefully watch our expenses and to invest prudently where we believe we’ll see the greatest returns.”
One area where Fleetwood invested was in its motorhome operations, which included the competition of a 121,000 square full body paint plant in Decatur, Ind., which was expected to be ready for full production this month, and an aggressive factory-to-consumer rebate program, which began on April 29 and is scheduled to end on Sunday (July 28). The rebates ranged from $1,500 to $3,000 per coach and were on 12 brands including certain 2000 to 2003 model year units.
As a result, shipments of Fleetwood’s Class A and Class C motorhomes, in terms of units, increased 30% during the three months ended April 28, the most current data available.
However, Fleetwood’s RV Group still posted a $442,000 operating loss during the February-through-April period. During last week’s conference call, Chuck Wilkinson, Fleetwood’s executive vice president-operations, did not respond directly to a question about whether the motorhome rebate program contributed to the RV Group’s operating loss this past spring.
Instead, Wilkinson said the RV Group performed significantly better than it did a year earlier, when it reported an operating loss of $29.9 million.
The difficulty Fleetwood has been experiencing with its travel trailer and fifth-wheel business is reflected in the fact that its shipments to dealers, in terms of units, were up only 1% during the February-through-April period. Meanwhile, travel trailer shipments, industrywide, were up 12.6% and fifth-wheels were up 9.9% when the first four months of this year are compared with the same period a year earlier, according to the Recreation Vehicle Industry Association (RVIA).