RV industry supplier firms are beginning to feel the retail market slowdown that is occurring because of consumer worries about the economic impact of a war against Iraq.
“Our orders are soft,” said Carl Pfalzgraf, vice president of sales at the Atwood Mobile Products subsidiary of DURA Automotive Systems Inc. “I’ve talked to some other suppliers. Some of them are a little better and some are a little worse than we are.”
Atwood, based in Rockford, Ill., now is forecasting total RV production of 300,000 units this year. That is better than the 280,000 units which, at the beginning of 2002, Atwood forecasted for the year.
Dr. Richard Curtin of the University of Michigan, the forecaster for the Recreation Vehicle Industry Association (RVIA), has announced a revised estimate on the number of RV shipments he expects this year. Curtin projects 316,900 RVs will be shipped from manufacturers to dealers in 2002, up 2% from 311,000 in 2002.
Meanwhile, Jay Hesse, president of Blue Ox Towing Products Division of Automatic Equipment Manufacturing Co., admits, “I’m a little nervous,” despite a 35.5% increase in volume at Blue Ox during January.
February also has been a good month for Blue Ox, but Hesse said he is “reluctant to tool up” because of the unknown economic consequences of a war with Iraq.
“I’m just going to wait and see and see how things go,” he said, noting that the Canadian market for towing products at least has proved to be a bright spot.
Pfalzgraf, the Atwood executive, explained: “We need to get (the international crisis) off dead center. The longer they drag this out, it’s just going to create more and more indecision in the buyer.
“Attendance at shows right now is very good, but people are not buying,” Pfalzgraf said. “Until this comes to an end, we are going to have these declines. I don’t believe gasoline prices, unless they get up to $2.25 or $2.50 range, are going to have a huge impact on it (the RV retail market). People are going to go out and use their RVs. If it costs them $20 extra to go out on their weekend trip, they’ll do it anyway.
“The question is availability,” he said. “And I don’t see any problem there and I don’t believe the economy itself is of major concern right now.”
Pfalzgraf believes the current RV market situation is very comparable to the months prior to Operation Desert Storm in 1990-91.
“From about August (1990) through February (1991), it (the RV market) was on on a constant decline,” he said. “Within 30 days of the end of the war, it took off almost straight up.
“Economic conditions are about the same now,” Pfalzgraf said. “Gas prices were high and inflation was little higher than it is now. We are seeing avery strong parallel to that time.”