The effects of rising interest rates crept into the bottom lines of recreational vehicle dealerships during the first quarter of 2006, according to Spader Business Management.
All dealer categories showed higher spending during the three-month period, although costs for smaller dealers were essentially flat.
Larger dealerships, defined as those with annual income over $10 million, were the only group to show an average net profit at $82,042 for the quarter, but it was 17% lower than the previous year’s average net income of $98,777.
Smaller dealers, those with annual income less than $5 million, posted an average net loss of $35,586 for the three months compared with an average net loss of $26,414 a year ago. Mid-size dealers with annual income between $5 million and $10 million showed an average net loss of $13,443 through March versus a net profit of $7,444 in 2005.
Larger dealers were the lone category to report a slight rise in new inventory levels during the period with an average of nearly $4.8 million from $4.7 million last year.
Smaller dealerships showed a 4.8% drop in average new inventory levels of just over $1 million while midsize dealers were flat, down 0.9% to an average of $2.1 million.
Other highlights from the first quarter include:
• Total revenues for larger dealers rose 1.2% from a year ago to an average of just over $4.1 million while sales of new units increased 0.2% to an average of $2.66 million.
• Mid-size dealers showed a 6.9% gain in total sales to an average of $1.54 million while new unit sales were up 5% to an average of $991,227.
• Total sales for smaller dealers in the first three months dropped 2.8% to an average of $635,076 while new unit sales were flat, averaging $406,103.
• Midsize dealers were the only category to report an average increase in sales of used units for the quarter.