Sales of motorhomes are starting to run out of gas, according to a report in USA Today.
On the heels of the best sales year since 1978, deliveries of new motorhomes to dealers fell 13.6% in the first four months of the year, compared with the same period in 2004, the Recreation Vehicle Industry Association (RVIA) reports.
Motorhome builder Winnebago Industries Inc., Forest City, Iowa, cited “lower retail demand and an industrywide oversupply of motor homes” this month in reporting flat earnings for the quarter ended May 28. The inventory buildup is left over from last year’s boom.
And higher gas prices are starting to take a toll. Although the $8.9 billion industry says it hasn’t seen influence in the recent past, a survey of 93 RV dealers released in April by analyst Craig Kennison of brokerage Robert W. Baird found “higher gas prices were repeatedly mentioned by dealers as affecting their business.”
Still, the effect of higher prices is somewhat muted because gas is still relatively cheap compared with the costs of buying a new motorhome.
The industry has also found a sweet spot of buyers among Baby Boomers, often well-off and close to retirement with time to travel. They, like others, often aren’t put off by higher gas prices. “People complain – but they complain while they’re writing their check,” says Jerry Larsen of Niel’s Motor Homes in Los Angeles.
Slowing motorhome sales are being offset by continued strong sales of towable RVs.
Sales were up 6.4% during the first four months of the year, compared with the same period in 2004. Towable vehicles typically are priced from about $4,000 to $100,000. Because they are less costly, they outsell motorhomes by a 3-1 margin.
Overall, the industry expects to be off only 3.5% in overall wholesale shipments for 2005. It would be the first drop in about five years.
One of the stronger growth areas is lightweight trailers, which save gas and can be pulled by smaller cars or trucks with less horsepower.