The inventory correction by RV dealers may be nearing an end, according to a survey of 45 randomly selected dealers by investment firm A.G. Edwards & Sons Inc.
The Edwards firm, which surveys RV dealers each quarter, reports that dealers now are more comfortable with their inventory levels than they were late last year.
During the current quarter, 27% of the dealers surveyed felt their new unit inventories were too big, which is in-line with previous surveys by the Edwards firm. In comparison, during the fourth quarter of last year, 49% of the dealers surveyed responded that their new product inventory was too high.
“While the inventory correction that has been occurring at the dealership level since the second quarter of 2000 may not be quite finished yet, it appears that it is nearing its end,” according to Craig Clark, associate market analyst at the Edwards firm.
Otherwise, the dealers surveyed by the Edwards firm estimate retail sales of towables will be up 0.7% during the first quarter, but motorhome sales will be down 6.8% when compared with the first quarter of 2000.
Retail sales in the Midwest surged 11.5% during the first quarter, but retail volume was down 11% in the West and 8.6% in the South/Southeast, according to the Edwards firm.
One possible explanation for the strength of the retail market in the Midwest early this year is that severe winter weather during November and December resulted in purchases being temporarily postponed, according to Clark.
In general, dealers remain optimistic, believing retail sales will increase 5.8% this year, when compared with 2000, Clark reported.