The top executive of U.S. motorhome maker Winnebago Industries Inc said today (Dec. 17) he remains cautious despite encouraging signs the recreational vehicle industry may be in the early stages of a rebound from its worst slump ever.
In an interview with Reuters, Bob Olson, Winnebago’s chairman, CEO and president, said he was pleased with a number of trends, including an improvement in motorhome deliveries that has prompted the company to ramp up production for the first time in years.
But Olson said he remained concerned that suppliers, who were hammered by the five-year downturn in RV sales, might have difficulty ramping up along with Winnebago and other RV makers and hamper the industry’s ability to fully capture any recovery.
“We rely on a lot of suppliers for a lot of raw materials — everything from polyethylene to ABS plastics to appliances to wood products to fabrics to chasses,” he said.
“I think as we gear up as an industry, you’re going to have some of these suppliers having a hard time ramping up their schedules to the levels we would like.”
Even so, Olson said he remained optimistic the industry would eventually recover to annual sales levels near the long-term average of 50,000 vehicles — nearly quadruple this year’s expected total.
The interview took place after Winnebago reported its latest quarterly results, which beat Wall Street expectations thanks to surprisingly strong demand for its biggest and most profitable vehicles.
The company, which has slashed half its work force over the past few years, said it was hiring workers back, ramping up production and canceling the traditional holiday shutdown in order to keep up with rebounding demand.
Winnebago said it had increased its work force by 350 during the quarter. The current headcount at the company, including the additional workers, is about 2,000. That is down from a peak of 4,220 in 2004.
U.S. motorhome manufacturers have watched sales drop for five years in a row as rising gasoline prices and then the worldwide economic downturn killed demand for its products, which in the case of Winnebago range in price from $65,000 to $317,000.
RV manufacturers expect to ship just 14,100 motorhomes in 2009, the industry’s worst showing in the 38 years data has been collected. That is down 50% from the 28,300 shipped in 2008 and down 80% from 71,800 in 2004.