Recreation Vehicle Dealers Association (RVDA) President Mike Molino said the retail market for RVs was “good” during the weeks leading up to the war in Iraq, and he described as “natural” the decision by dealers to reduce the size of their inventories.
“Dealers are telling us that the RV retail market is good in most areas of the country,” Molino said during an interview with RVBUSINESS.COM today (March 20). “The towables market has held up extremely well and motorized is good in most areas.
“We know from demographic analyses that there is much greater potential for sales than we are currently seeing,” Molino continued. “As uncertainties that surround us subside, retail sales should become even stronger.”
In general, RV dealers built up their inventories during the fourth quarter of 2002, and their inventories in the first quarter of this year were larger than they were a year ago, Molino said. “Wholesale shipments outpaced retail sales by more than 10% in 2002 in both towables and motorized product, so it’s natural that there is going to be some sell-down of inventory before new orders are placed.”
However, Molino said, the slowdown in dealer orders, which has forced many manufacturers to operate on four-day work weeks, was not the result of dealers canceling orders.
Consequently, Molino does not believe RV dealers are being too conservative in their inventory management practices at this time.
“Dealers can get in more trouble with their (inventory) buying decisions than with any other aspect of their business,” Molino said. “Manufacturers who really understand how successful dealerships operate are helpful in ensuring that dealers don’t over-inventory and that they (manufacturers) don’t over-produce.
“We have a lot of work to do in helping dealers and manufacturers develop better communication systems that track retail sales so that manufacturers produce the right products in the right numbers,” he said. “I don’t think second-guessing dealers’ inventory decisions helps the industry, but if manufacturers focused on retail sales and the factors that affect those sales, they could help their dealers manage better.”