Third-quarter towable RV production at the National RV division of National RV Holdings Inc. was down 25% from the second quarter, but President and CEO Brad Albrechtsen said the firm remains committed to the towables sector.
The company’s towable RV output declined sharply because “we made a strategic decision in Q3 to ramp up (Class A) motorhome production about 25%. So, in order to do that, we pulled some of our skilled labor from the towable line, reducing our production so we could insure our achievement of the increase in production on the motorhome line,” Albrechtsen said during a conference call with investment analysts last week.
National RV has experienced “steady demand” for its towables, Albrechtsen said, adding that the company is primarily building toy haulers, which require more time to build and thus contributed to the lower volume.
The National RV division currently is emphasizing Class A motorhome production because Class A’s are providing the best profit margins. However, Albrechtsen said, towables have, at times in the past, provided better profit margins than motorhomes. “Building towables gives us better facility utilization and allows us to spread our overhead costs over more units, which is very helpful right now,” he said.
At National RV’s Country Coach highline Class A motorhome manufacturing operation in Oregon, Albrechtsen said, “We have chosen to maintain a pretty aggressive build schedule primarily because we believed we were underrepresented on dealers’ lots; dealers weren’t stocking to their agreement levels, so we made a significant push to continue to get the shelf space we believe that product deserves.”
He said National RV officials believed the sales rate would catch up to the wholesale rate as they put more units out into the marketplace and that that in fact has occurred.
However, Albrechtsen said, “We do have too much inventory of the highline product right now and it’s our intent to look at our production rate during the fourth quarter.”
As a result, Country Coach might “extend or adjust” its customary two-week holiday shutdown in late December “to bring down that finished goods inventory,” he said.