Recreational Vehicle Industry Analysis

Topics: Household income in the United States, Recreational vehicle, Travel trailer Pages: 11 (4547 words) Published: October 24, 2011
The Recreational Vehicle Industry

MGT 698
5 October 2011

For most people, the recreational vehicle (RV) industry is a large subject to wrap their heads around due to the rather vast array of products associated with the term “recreational vehicle”. When conducting web searches for information regarding the recreational vehicle industry I found it a little bit overwhelming in that it contained everything from a Ski Doo Grand Touring luxury snow machine to a 27’ Peterbilt 379X with a custom 53’ Elite tri-axle car hauler/conversion apartment sleeper. To narrow, and better define, this industry the definition of recreational vehicle will be a motorized or towable vehicle that incorporates living spaces and home-like amenities. Due to the fact that most professional analysts consider this subject area to fall under the “luxury” items category I think it very interesting that today’s overall RV ownership percentages are in an upward climb even though the national unemployment rate is 9.3%, the highest it has been since January 2004 when it was approximately 6.4% Richard Curtin, director of consumers surveys at the University of Michigan, publishes a monthly report on consumer confidence as well as is considered one of the leading economists in this area, states “Today’s record RV ownership levels reflect the enduring appeal of the RV lifestyle despite economic challenges.” Enduring appeal and lifestyle are words being used all over the country to describe this unusual economic phenomenon where in a time people should be saving and scrimping they’re not; they are buying these vehicles and enjoying life to the hilt. As stated earlier, the largest majority of RV deliveries in the last few years has been to the upper middle class, 50 and older generation; the baby boomers. Baby boomers are in the prime of their retired traveling years and have been a large reason for the surge in RV deliveries and the appeared defiance in terms of yielding to the economic pressures encompassing the rest of the age/income groups.

With over 900 RV manufacturing companies and thousands of campgrounds around the country one would think the products and services would be too great to define clearly, however, this industry is simply about traveling and having fun and it doesn’t take a lot to do that. Major end items include towable and motorized recreational vehicles. Towable RVs (more frequently referred to as travel trailers) encompass conventional towable travel trailers; fifth-wheel travel trailers; folding trailer; and slide in truck-bed campers. Major decision points for buyers include luxury internal amenities, sleeping positions, and the actual gross towing weight of the trailer. On the motorized, commonly referred to as RVs or motorhomes, side (motorhomes range from 16-40 feet in length) there are Class A models built on medium to heavy duty trucks chassis’ similar to Greyhound busses; Class B models that are conventional automotive vans converted into smaller, functional living spaces; and Class C motorhomes which are smaller than Class A’s, but larger than Class B’s, and built on light to medium van and truck chassis’. All classes of motorhomes are differentiated by internal luxury amenities, and power train; or more precisely power verses economy of the power train.

The chassis’ used to manufacture RVs are usually purchased from an automotive supplier such as Ford, Chevrolet, or Chrysler; however, in the Class A market the chassis’ are purchased from companies such as Volvo and Nova Bus. The single greatest manufacturing cost for manufacturers is the chassis as it includes the power train, drive train, fuels systems, wheels, and tires. Other costs that are considered major for both travel trailers and RV’s would be things such as the aluminum siding, insulation, electronic slide packages, plumbing, wiring bundles, and appliances. It’s not uncommon for RV manufacturing companies to manufacture a large portion of the...
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