In this blog we will cover the latest RV and travel data news. September 2023 RV production numbers are out, and we’ll cover the latest travel data so you can better gauge if it’s time to buy, sell or hold an RV. Later in the news, we’ll examine how the industry downturn is influencing one of the largest RV manufacturers.
RVIA Numbers
On October 25th, 2023, the RVIA posted the latest RV wholesale shipment data for September 2023. Production continued a downward trend compared to the prior year, as expected. Only 24,700 total RVs were shipped in September, down from 28,333 in September 2022. September 2023 was the lowest year since before 2016. Travel trailers also declined year-over-year, with only 16,542 shipped in September vs. 17,599 a year ago. For context, September 2021 saw production of 40,254 travel trailers – almost 24,000 more than in September 2023.
I usually don’t stop at the beginning of the data review and add commentary, but I think it’s time. What happened in the past few years is that the RV industry forced forward a massive amount of sales volume due to the pandemic and showed little restraint in production during the demand surge. This lack of discipline meant hiring many new workers to meet demand. Average line tenures went down, and so did quality. In essence, the industry gave itself a black eye and inoculated tens of thousands of new customers. As we’ll see in a moment, the number of used RVs for sale is at all-time highs, meaning many of the people introduced to RVing during the pandemic likely are now dumping their units.
Moreover, as ownership horror stories began showing up on social media, a bigger problem surfaced. Existing RV owners who were usually upgrading RVs every few years in mass likely started to sit out their next upgrade. It’s important to understand that manufacturers probably don’t make much on someone’s first RV purchase but do as people naturally upgrade to larger, more expensive RVs. This engine has been dramatically curtailed, as seen by the data of the past 15 months. The lack of discipline in manufacturing during the pandemic has proven to be both a huge inoculation incident for new RVers and an off-switch for the upgrade cycle.
I have little hope of real change, but there needs to be a production committee with representatives from each manufacturer, supplier, and dealer representation to push back on the current trend. If demand surges, the committee would put on the breaks and insist on quality and slower production. If demand slows, the committee needs to push for innovation and collectively shoulder costs to reduce aging inventory through various buybacks, discounting, and even demolition of older units. There needs to be a rainy-day fund set up to fund these inventory reductions. Okay, enough said, let’s move on.
RV Trader Numbers
RVs for sale on RVTrader.com are slowly increasing, with new 2024 models arriving on dealer lots. There were 119,819 new RVs for sale as of October 25th. This is up 1,030 units from late September’s 118,789 and down approximately 34,000 new units versus late October 2022’s 153,993 new units.
Used units for sale increased to 60,538, up from 59,777 in late September, breaching the 60k mark for the past four weeks. This time last year, the number of used RVs for sale was 52,281, so we have just under 8,300 more used units for sale now versus a year ago. As the number of used RVs for sale continues to increase, it is a sign that more people are trying to get rid of their existing RVs. This is the ugly backside of the pandemic surge I mentioned before.
Our model year chart shows new 2022 model volumes for the past twenty-two weeks. As dealers unload these 2022 units, the number of models has decreased from 39,100 to 12,355 units. The orange line shows 2023 models going from 93,797 to 54,170 units over the past seventeen weeks. Meanwhile, the red line shows 2024 models now showing up on RVTrader.com. Seventeen weeks ago, there were 8,238 new 2024s, and now there are 52,931. So, there are still about 66,500 new 2022 and 2023 models on dealer lots. As a reminder, many but not all dealers advertise on RVTrader.com to sell inventory. It remains an excellent proxy for overall dealer inventory.
High-End Market
For the high-end market, inventory levels for Colonial Airstream in Millstone Township, New Jersey, one of the nation’s largest Airstream dealers, is now seeing a glut of in-stock units.
About a year ago, roughly 52% of Colonial’s inventory was preordered, meaning only 48% of their Airstream inventory was either on the lot for sale or being delivered and available. As of October 25th, 2023, roughly 89% of inventory is available for sale, with only 11% spoken for. This has meant a continued buildup of on-the-lot inventory. Colonial now has 119 new units on the lot for sale vs. 101 a month ago. This increasing glut should mean a potential buyer can bargain significantly. The problem is that MSRPs have risen considerably in the past few years, so even discounted, these units can be costly.
BLS RV Manufacturing Labor Stats
The Bureau of Labor Statistics has revised Elkhart County, Indiana’s latest manufacturing employment data for August 2023. We cover this because a very high percentage of North American RVs are made in this area of the country. The revision shows that at the height of production in the spring and early summer of 2022, there were 77,200 people employed in manufacturing. For July 2023, this number stands at 69,600 people, down 7,600 since the peak.
AAA
Gas prices have decreased sharply in the past month. According to AAA, the current average nationwide price as of October 28th was $3.503 per gallon for regular unleaded, down $.332 from a month ago and down $.26 per gallon from a year ago. An RV trip of 3,000 miles at 10 mpg would cost $1,051 now vs. $1,128 a year ago, a 6.9% decrease YoY. Diesel prices have also decreased in the past month and now sit at $4.485, down $.082 from a month ago and down $.82 from a year ago. A similar 3,000-mile trip getting 15 mpg would cost $897 now vs. $1062 a year ago, a 15.5% decrease.
Grand Design to Build Motorhomes[1]
Winnebago Industries Grand Design division will start producing motorhomes in 2024, according to Mike Happe, President and CEO of Winnebago. Winnebago already builds motorhomes through its Winnebago and Newmar brands. Yet, Happe isn’t concerned that Grand Design will cannibalize motorhome sales from these brands, “We absolutely believe that the addition of Grand Design motorized into our business strategy will be net incremental to that market share,” he said. “We would not be funding … the investment in this business strategy if it did not have a standalone ROI that was projected to be positive.”
My take is that since towable sales have declined considerably for all manufacturers, Grand Design, which has been focused on towables, needs to branch out to continue profitable operations. I am unclear on where a Grand Design fits from a price and quality perspective vs. Winnebago. Will they price Grand Design under Newmar but possibly above Winnebago, relegating Winnebago to their entry-level motorhome, or make Grand Design the entry tier and make Winnebago the brand just below Newmar?
I am a bit more skeptical about cannibalization than Mr. Happe since there appears to be some direct competition between the current Winnebago motorhomes and the new Grand Design motorhomes. Looking past the typical CEO speak, I think the real deal is that Grand Design needs to move production away from towables, even if it cannibalizes some Winnebago motorhome sales.
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That should do it. All the best in your camping adventures!
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