Amid an economic downturn peppered with high gas prices and tight credit, you’d think it would be impossible to get people shopping for a 40-foot motor home with a six-figure sticker and a 100-gallon fuel tank.
But, according to a report in the Sacramento, Calif., Bee, you might be wrong.
In Davis, Calif., earlier this week, Sally Kemp was hitting RV lots looking for a bargain-priced recreational vehicle. For her, an RV purchase is “an investment in the future.”
Kemp has had a lot of company recently. Offering steep discounts, RV dealers have reported a spike in consumers looking to get a vehicle for a fraction of the original retail price.
The tough times have hit the RV industry hard. Three area dealers – La Mesa RV Center in Davis, Dan Gamel’s Rocklin RV Center and Nu Star RV Center near Rancho Cordova – recently announced they’re closing up shop.
Yet the RV industry seems to be proving that you can sell anything if you discount it enough.
Area dealers are selling RVs big and small at up to 40% below manufacturers’ suggested retail prices. And instead of being deserted, local lots are drawing consumer traffic.
“RVs aren’t daily transportation like big SUVs,” said Sacramentan Dave Logan as he strolled Gamel’s Rocklin RV Center lot, perusing RVs for prices 30% to 40% percent below previously listed values. “RVs are just that – recreational. People will always want to camp and travel.”
Dan Gamel said he has moved $40 million in vehicles since March. Things have been going so well that he said he’s not sure when he might shut down his California stores.
He even hinted they might continue to operate in some fashion for an extended time. He declined to elaborate.
Henry Myers of Sacramento isn’t waiting for the economy to improve. He was shopping the RV lots in Davis – including La Mesa RV Center – looking for a large trailer.
“I know you hear this everywhere, but it’s true: Now is the best time to buy,” Myers said. “If you have the money to buy a house, prices now are lower than they have been in years. The same thing is going on now with (RVs).”
Industry officials concede that RV dealers nationwide are under pressure to move inventory, but they said that is nothing new.
“The RV industry is cyclical, and Wall Street analysts have cited it as a bellwether industry,” said Kevin Broom, a spokesman for the RV association. “RVs are a discretionary purchase, and when the economy declines, one of the first things that happens is people cut back on discretionary purchases. They’re also the first thing that starts picking up when the economy improves.”
Ralph Graves, the 33-year-old general manager of Dan Gamel’s Rocklin RV Center, agrees that price cuts are bringing people into the market.
“What’s happened in the market is that dealers have become more aggressive and proactive reacting to market demand,” Graves said. “It’s allowed people who once thought they couldn’t afford an RV to buy one.”