Greg Gerber posted on March 20, 2009 06:59
CYBERSPACE -- In an article entitled "The RV's last roundup" posted today at Salon.com, author Mark Schone predicts it will be very hard for the RV industry to survive.
"What Grandma and Pop Pop really enjoyed about the RV, I think, was the companionship. There was a circuit, and they would meet up with their newfound RV friends in places like Arizona and unfold the folding chairs and talk. They even once joined a multi-land-yacht armada that sailed down the Pan-American Highway to Panama," Schone wrote.
"But if they were still alive and chatting with their RV friends around a campfire somewhere, their conversation would probably be taking a mournful turn. The RV industry is in dire trouble, and the whole RV subculture can feel it. Why so pessimistic? Perhaps because 18 percent of respondents to a February survey said that the makers of their own RV models had already gone out of business," he added. "The RV lifestyle goes on, but the RV business, starved by $4-a-gallon gas last year, is now reeling from the recession and a serious credit drought. An industry that has always been characterized by peaks and valleys, ultrasensitive to economic change, has entered the Valley of Death."
"The industry's immediate problems are tied to the recession. The weak economy makes would-be RV owners skittish about buying. But RVs have also experienced a uniquely painful credit crunch, which makes loans hard to come by for those dreamers still willing to make the leap. Lenders are balking at doling out cash for a six-figure discretionary purchase. RVs are not cheap," writes Schone. "Analysts say the RV credit crunch may not ease for another 12 to 18 months. Meanwhile, the industry is suffering permanent damage; even those companies that remain are mass-producing pink slips. The industry has already shed 280,000 jobs, more than half its workforce, since mid-2007."
"RV manufacturers have placed some hopes in the economic stimulus package, which includes credit-easing provisions and tax breaks intended to goose RV sales. Longer-term, they have faith in the sheer statistical weight of baby boomers; the oldest post-World War II babies will turn 65 in 2010, and après them the deluge," he added.
"But in the short term, some shoppers are scared to buy RVs simply because they don't know if the manufacturers will be around to honor service and parts warranties. And in the future, there is no reason to believe gas will stay as cheap as it is today, unless the economy is so bad that demand stays low. Either fork in the road promises hardship for the RV industry," wrote Schone.
"RV blogger Jim Twamley, who predicted the recent deaths of Monaco, Fleetwood and Country Coach, has serious doubts that any RV manufacturers will last much longer. 'I'm not sure anyone is going to survive,' Twamley told Salon. 'Thor Industries has a good balance sheet. Forest River might survive, because they are backed by Warren Buffet. And I guess Winnebago. If anyone survives, it will be those three. But I won't be surprised if no one does,'" Schone wrote.
Mark Polk, an RV expert who owns RV Education 101, told Salon the industry is already thinking smaller. "The manufacturers," said Polk, "will be trying to trim some of the cost off, and trying to get their vehicles into a range where the $40,000 a year earner will be comfortable with an RV payment."
To read the complete story at Salon.com, click here.