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International political uncertainty has pushed all RV manufacturing company stock prices down near their 52-week lows, but Crowe Capital Markets, a Chicago-based investment bank, remains bullish on the RV sector.
Crowe Capital believes RV retail sales will expand to $13.7 billion by 2005, which would represent a 25% increase from the industry’s total sales of $10.96 billion (excluding conversion vehicles) in 2002, according to the Recreation Vehicle Industry Association (RVIA).
The total of $10.96 billion in motorhome and towable RV retail sales in 2002 is equivalent to a 27% increase over the $8.6 billion in sales during the RV industry recession year of 2001, according to the RVIA.
Crowe Capital agrees with all of the forecasters who believe that the huge number of Baby Boomers entering the peak RV-buying period of their lives (age 45 to 64) will propel the RV industry forward after the international uncertainty has passed.
Boomers view RVs as “a utilitarian asset they can understand the value of,” Crowe Capital Managing Director Mike McCoy told The Press-Enterprise of Riverside, Calif.
Three years of declining stock market prices might actually boost RV sales because it makes real property, such as an RV, appear to be a better investment than financial assets, such as stocks, McCoy said.
Although the recent spike in fuel prices might cause RV sales to slow down, McCoy believes the impact will be temporary, he told The Press-Enterprise.
Meanwhile, interest rates might not decline anymore, but they currently are “very, very low,” which will continue helping RV sales. If rates start to rise, then, McCoy said, “It will take quite a significant change in interest rates before it will dampen sales, and we don’t anticipate that happening this year.”