The Buying Excitement in Diesel Motor Homes
Below is a MRR and PLR article in category Business -> subcategory Sales.
The Thrill of Buying Diesel Motor Homes
Summary:
A Bloomberg index tracking five leading RV suppliers has increased by 7.9% this year, outpacing the 7.1% growth of the S&P 500 Index of large U.S. manufacturers.---
The Growing Enthusiasm for Diesel Motor Homes
Thor Industries CEO Wade Thompson, leading the world in diesel pusher motorhomes and travel trailers, anticipates continued growth in the diesel pusher market for the fourth consecutive year. Thompson, along with leaders from competing companies, plans to capture an expanding market by increasing production and expanding operations to meet soaring demand. These plans were discussed at the National Holiday Rambler Producer's Show in Louisville, Kentucky, where companies logged substantial pre-orders for the first half of 2005. This optimism contrasts with a University of Michigan prediction that rising fuel prices and interest rates could pose market risks.
Thor, Fleetwood Enterprises, Winnebago Industries, and other major RV manufacturers expect a 14% increase in shipments this year to 364,900 units. This would be the highest figure since 1978, driven by retirees aged 50-64 and a growing domestic travel trend, fueled by concerns about international terrorism.
Thompson noted from a Thor travel trailer, "After a slight market softening, November has picked up, and I expect growth of 8% to 10% next year."
The University of Michigan forecasts a 3.3% decline to 352,700 units next year. Their predictions, based on historical data and published by Richard Curtin, director of surveys and the consumer confidence index at the university, are met with skepticism by industry insiders.
Ted McKay, sales manager at Media Camping Center in Hatfield, Pa., expressed optimism, anticipating sales to rise beyond the current 60 units per month, supported by financing rates of 5.75%, below the decade average of 7.5%.
Barry Vogel, an analyst at Barry Vogel & Associates in White Plains, N.Y., added, "Rates are still favorable for sales. The industry's health remains robust."
Fleetwood expanded its workforce by 1,000 employees last month and plans to add another 300 to 400 in Pennsylvania and California factories within a year, according to CEO Ed Caudill. Previously, the company cut 9,000 jobs from 2000 to 2003 to reduce costs.
Thor intends to nearly double its capital spending to $50 million this year, introducing at least seven new manufacturing facilities, Thompson reported. Winnebago, which hired 1,000 new employees last term, expects stable production over the next year, noted Board President Bruce Hertzke.
"We've struggled to meet demand for three out of the past four years," Hertzke said. "Not only are retirees purchasing RVs, but younger buyers, as young as 35, are entering the market."
Coachmen Industries saw shipments stabilize towards the end of summer, with a resurgence in November, reported Board President Claire Skinner. The Elkhart, Ind.-based company hired approximately 400 employees last year and expects more hires if sales continue to rise, contributing to a local unemployment rate of 3.7% due to manufacturing growth.
"A month ago, I might have predicted declining shipments, but post-election, the outlook has improved," Skinner commented in an interview.
The Bloomberg index, reflecting shares of the leading RV providers, has climbed 7.9% this year, surpassing the 7.1% growth of the S&P 500 Index of large U.S. manufacturers.
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