Monaco Coach Corp. announced today (Aug. 20) that it will increase its motorhome production rates slightly next month in response to the demand for its 2004 models.
Monaco laid-off 14% of its labor force in April and lowered its motorhome output at that time to 133 units per week, from 177 units per week, in an effort to reduce its finished goods inventory, which had ballooned to about 500 Class A motorhomes valued at around $66 million as of late March.
However, demand has picked up and the company’s unsold “yard” inventory has been whittled down to the point where it can increase its output by 11 motorhomes per week beginning in September.
“If current trends continue,” Monaco will increase motorhome output at its Indiana factories by five units per week and by six units per week as its plants in Oregon, the company reported today.
“Retail sales for our 2004 models have met our expectations and our retail dealer partners are responding with stronger wholesale orders,” said John Nepute, president. “Improving demand, coupled with finished goods inventory reductions will allow us to increase production modestly.”
Monaco did not say today whether it has plans to recall any of the 850 employees who were laid-off in April.
During the first half of this year, largely due to production cut-backs announced in April, Monaco’s motorhome shipments declined 17% to 3,345 units, compared with 4,018 units shipped to its dealers during the first half of 2002.
The planned increase in production was “was consistent with the third quarter 2003 expectations we presented” to stock market analysts about a month ago, said Marty Daley, CFO. At that time, Daley estimated Monaco’s third quarter sales revenue would amount to around $268 million, which would about equal its third quarter 2002 sales revenue total.