The Los Angeles Times last week proclaimed that the RV industry is on a “bad stretch of road” in the headline of an article that reported the management shakeup at Fleetwood Enterprises Inc., Riverside, Calif., in addition to the company’s first-quarter results, which were 50% below last year.
“The problem: Rising interest rates, higher gasoline prices and excess stockpiles on dealers’ lots are braking the industry’s growth,” the story said. “They’re also threatening to send the highly cyclical RV industry into another of its long-term slumps, following a banner year in 1999.”
Acknowledging that motorhome sales have been affected the most, Fleetwood officials noted that dealers have cut back sharply on floor inventory because of recently increased interest rates.
“That backs up to the factory floor rather quickly,” said Paul Bingham, Fleetwood’s chief financial officer.
The story noted that the problems are not Fleetwood’s alone.
National RV Holdings Inc., Perris, Calif., the story said, reported second quarter profits dropped 89% and subsequently laid off 350 workers. On Wall Street, Fleetwood’s stock price had dropped 39% for the year through early August, while National’s stock was down 35%. Meanwhile, Coachmen Industries Inc.’s stock was off 30%, Winnebago Industries Inc. was down 35% and Thor Industries Inc. dipped 20%.
Although overall RV sales still are expected to reach 330,000 units this year — up from 321,200 in 1999 — motorhome sales are expected to fall 5% this year after increasing 13% in 1999, according to Jeffrey Graff, an analyst for the investment firm A.G. Edwards quoted in the story.