What Just Happened? The RV Industry is Booming in Ways that No One Expected a Year AgoMay 04, 2021
Wow! What a year it has been for the RV industry.
After a downturn in 2019, with shipments falling off 16% from 2018, and the total number of RV shipments standing at 406,070 units at year’s end, many expected the same in 2020 or maybe a slight improvement.
Instead, the COVID-19 crisis brought a surge of interest from consumers and the RV industry ended 2020 with a huge jump in shipment numbers to 430,412 units, up 6% against 2019, on par with the third best annual shipment total on record.
An impressive turnaround, but that isn’t the end of this story.
With plenty of steam heading into 2021, many in the RV industry felt that this year was going to be huge. With dealers struggling to get units to their lots, RV manufacturers working at full steam and the demand for units still high, the early shipment numbers indicate the industry could bein for another record-breaking year.
So far, shipments are on a record-breaking pace, with 54,291 wholesale RV units shipped this past March, a more than 5% increase over the previous record set in March of 2018.
The RV Industry Association (RVIA) is expecting RV shipments to land somewhere between 523,139 and 543,572 units. Even the lower number would be a record-breaking year for the industry.
March shipments also bring total RV shipments in the first quarter of 2021 to a record-breaking 148,507 units, a nearly 10% increase over the previous record set in the first quarter of 2018.
The current COVID-19 crisis is not the only reason the RV industry is seeing an uptick in orders, according to RVIA President & CEO Craig Kirby. He notes that over the past year people have come to dealership lots for a variety of reasons, from the love of road trips, a desire to travel in comfort, a desire to explore the great outdoors, and the ability to use an RV as a basecamp for other outdoor recreation activities.
“While many new buyers reported the pandemic did have some impact on their decision to purchase, recent survey results showed ‘restriction on other travel due to COVID-19 came in fourth from the bottom of the list,” he explained. “This really shows that people didn’t buy RVs over the past year because there weren’t any other options, they bought RVs because of the endless opportunities RVing provides to travel and get outdoors.”
Still, RV manufacturers are facing production issues, including a lack of workers in some areas of North America, a lack of components to build RVs with and so on. But the industry has weathered the storm better than others, with RV production ramping back up quickly in 2020 after the initial COVID-19 related shutdowns, according to the RVIA.
Many manufacturers note that suppliers in the industry have been working diligently to get plants the parts they need to build RVs.
“While demand-driven supply chain challenges regularly impact our production, we will constantly work with our supply partners to manage any future disruptions as best we can. Our second quarter results demonstrate that our supply network is assisting in incredible year-over-year production volume increases, and for that we are appreciative,” said Winnebago Industries President &CEO Michael Happe during the company’s recent earnings call.
Recent earnings reports continue to demonstrate that everyone in the RV industry — not just RV manufacturers — are seeing an increase in demand as they scramble to create components and grow.
Lippert Components Inc. (LCI), which manufacturers a variety of components for the RV industry, announced net sales of $1 billion during its first quarter in early May, and Camping World Holdings followed suit, reporting $1.5 billion in first quarter revenue.
Camping World saw a more than $500 million year-over-year increase. That is incredible!
Patrick Industries Inc., another large component manufacturer, saw a 44% increase in first quarter sales, with a 74% increase in operating income.
On the retail side, the RV industry received even more great news from Statistical Surveys Inc.(SSI), the Grand Rapids, Mich.-based source of RV industry data.
The retail demand for RVs shows no signs of leveling off, with 35,032 retail registrations recorded across North America in February. That figure represents the best February ever in terms of retail sales, SSI officials confirmed, as well as a 21.5% increase over last year’s then-record total of 28,831 units.
For reference, in 2010 there were 11,621 retail registrations in February of that year.
It is just an amazing time to be involved in the RV industry and many industry insiders expect growth trends to continue, as long as the economy remains in positive territory.
The Consumer Confidence Index noted that consumer confidence rose sharply in April, a sign that many consumers are comfortable with the economy as it stands right now.
That surely will continue to boost the confidence of the RV industry as it continues to see shipment numbers move up and as companies continue to see profits grow too.