Toward the end of our July 16 post, “The Future of America’s Economy…,” we suggested readers “watch for the June shipment numbers to be released by the RVIA (Recreational Vehicle Industry Association). If a disturbing trend should develop…”
As for what may be developing, please read on.
On July 23, Bloomberg cited comments from CL King analyst, Scott Stember, as the reason for the recent selloff in RV stocks. Stember believes the RVIA 2018 estimate for 7% industry shipment growth “will prove tough to hit.” He expects RVIA to lower its estimate around “the all-important” Open House event (late September) to 515,000-520,000 units from the current estimate of 540,000 units (versus 505,000 units in 2017).
[Due to a] slower-than-expected start to this year (weather related) at retail, industry trend more toward high-single-digit growth trajectory (vs up low doubles the last two years), leaving industry with “higher-than-optimal-stock” as Open House nears (and 2019 models will be introduced).
Stember also suggests that “certain OEMs plan to take additional time off in July-August (beyond the known two-week Fourth of July shutdown); wouldn’t be surprising to see Q3 towable shipment numbers decline in at least the low-double-digit range.” Stember says RVIA should publish June data “later this week.”
Shipment data for June, which does not follow a set disclosure schedule, was in fact released two days later, on July 25. Year-to-date total RV shipments are up 5.9% compared to last year through June.
The monthly year-over-year data, however, is less encouraging.
June 2018 compared to June 2017
|Class A Motorhomes||-26.70%|
|Class B Motorhomes||-20.70%|
|Total RV Shipments||-11.40%|
As Stember inferred above, it seems probable that July shipments will be down year-over-year as well.
In talking with several large and successful Midwestern dealers, the message is clearly different. One, which sells a lot of Class A’s, said that if they could find them, they’d buy 50 more units for inventory immediately. Another, with a significantly lower average selling price, said they had the best June ever but have had a hint of a slowdown in the subprime buyer category due to credit issues.
These anecdotes aside, it appears that manufacturers are responding to retail inventory levels, which may be a bit on the high side. Camping World’s Q2 conference call is on August 7, at 4:30 PM. Perhaps we’ll know more then…
Our fascination with the RV industry is, first and foremost, because it is Elkhart Indiana’s success story. Many of the people in the industry are our friends. Tangentially, as we noted in the last post, it is also an important leading indicator for the economy at large. Just as the WSJ feature title implies, “The Future of America’s Economy… Looks a lot like Elkhart, Indiana.”