WSJ: It’s a Buyer’s Market for RVs, Boats, Other Pandemic Toys – RVBusiness – Breaking RV Industry News
EDITOR’S NOTE: The following is an edited excerpt of an article by Spencer Jakab on The Wall Street Journal website.
They say that the second-happiest day in a sailor’s life is when he buys his boat. The happiest is the day he sells it.
Buyer’s remorse isn’t universal, and it often takes a while to set in, but the Covid-19 pandemic saw more than its share of regrettable big-ticket purchases. Extra cash and a desire for social distancing pushed sales of recreational vehicles, boats, motorcycles and snowmobiles to multiyear or all-time records. Then the cost of living increased, remote working got harder and, crucially, the interest rates to finance shiny, new playthings surged.
“The whole business is based on a monthly payment,” says Marcus Lemonis, chief executive of Camping World Holdings (CWH), the world’s largest RV retailer.
The result: Overflowing dealer lots at a time when plenty of lightly-used versions sit in driveways and marinas. That sounds like awful news for companies that struggled with pandemic supply-chain issues only to see demand for their recreational wares collapse once those problems got ironed out. It depends, though: Some are making lemonade out of lemons.
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The boom and bust for RVs has been steep. Initially hampered by its own supply-chain issues, the industry geared up and hit its monthly record for North American wholesale deliveries to dealers of 64,454 in March 2022, according to the RV Industry Association. That was the month the Federal Reserve began raising interest rates from zero. Within a year, monthly shipments had dropped by more than half, with the decline much sharper for pricey motor homes than for trailers. They have improved only modestly since then. Meanwhile, the number of used units listed for sale on RVTrader.com is more than twice as high as during the period of peak demand.
If nearly all you do is make RVs, that is a problem. On Wednesday THOR Industries, the world’s largest RV manufacturer, reported that sales for its fiscal third quarter were down by 40% and earnings per share down by two-thirds from the same period in 2022. Some RV makers have scrambled to redesign their products so that “decontented” versions with fewer bells and whistles can be sold at a lower sticker price — a move one blogger dubbed “cheapification.”
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