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Mid-size RV dealer’s net profits dramatically improved during the first four months of this year and they carried smaller new RV unit inventories, in dollar terms, as of April 30, according to consultant firm The Spader Companies.
The average mid-size dealer, which the Spader firm defines as having between $5 million and $10 million in annual sales, earned a total of $54,012 during the first four months of this year, a 72% increase over the $31,397 earned a year earlier.
Meanwhile, the average mid-size dealer had a new RV unit inventory valued at $1,756,225 as of April 30, a 6% decline from the $1,868,805 in inventory stocked a year earlier.
However, new RV unit sales revenue at the average mid-size dealer increased 15.7% during the first four months of this year to $1,534,485 and total dealership sales were up 11.4% to $2,453,077, the Spader firm reports.
As was the case with dealers with more than $10 million in annual revenue, lower interest rates on inventory financing helped mid-size dealer profitability. All expenses at the average mid-size dealer were up during the first four months of this year, except for interest expenses. The average mid-size dealer’s interest expenses declined 36.7% during the first four months of this year to $32,921, compared with $52,159 during the first four months of 2001.
The Federal Reserve began lowering interest rates by small increments early in 2001 and continued throughout last year. So far, this year, the Fed has left interest rates unchanged at a low level.