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Home > RV News > Article: RV industry grows as boomers hit the highways
RV News

RV industry grows as boomers hit the highways
By Susan Kelly, Reuters
Sun Jun 6, 2004

Provided by:
ELKHART, Ind., June 6 (Reuters) - The recreational vehicle capital of the world is in the midst of a hiring boom.

In the sprawling manufacturing plants south of Interstate 80-90 in Elkhart County, the scene resembles a bustling construction site, the sound of drills buzzing in the air, as plumbers, electricians and carpenters work at outfitting the giant rigs with all the comforts of home.

Despite record-high prices at the gas pump, the Recreational Vehicle Industry Association expects sales of RVs to reach their highest level in 25 years, fueled by middle-aged Americans' increasing affinity for the big fuel-thirsty rigs.

"It's a challenge for us to get good employees right now," said Jim Mac, marketing director for RV maker Monaco Coach Corp., which operates four plants in the Elkhart area.

Although Wall Street has worried that high fuel costs could curb consumers' enthusiasm for RVs, the industry so far shows no sign of slowing. The improving economy and Americans' desire to spend more time with their families are helping to set the pace.

The jobless rate for Elkhart County, where one in four workers is employed in the RV industry, is an enviable 4 percent, a full point below the average for the state as a whole.

"This is the baby-boom generation that has fueled remarkable increases in demand the past several years and will continue to do so in the next decade," said Richard Curtin, director of consumer surveys at the University of Michigan.

As more families with children join the traditional RV market of active retirees, the age of the average buyer has fallen to 49 from 51 three years ago. More and more enthusiasts have college educations and white-collar jobs, mirroring changes in the U.S. population overall.

"There is substantial demand for the RV lifestyle," Curtin said. "People find it a very satisfying and fulfilling way to travel and participate in outdoor recreation."

GAS-PRICE WORRIES

Nowadays, higher-end vehicles come with such conveniences as entertainment systems, washer/dryers and walls that slide out to expand rooms. But smaller and more affordable towable models, pulled by a sport utility vehicle or pickup, are also selling well.

RV shipments began to accelerate at the start of this year, as the economy improved, and jumped nearly 22 percent in April from a year earlier, when the Iraq war slowed orders. With demand strong, manufacturers have been able to pass increases in raw material costs on to customers.

Still, worries about the potential impact of high gas prices on sales have weighed on shares of RV makers like Winnebago Industries Inc., Fleetwood Enterprises Inc. and Coachmen Industries Inc. in recent weeks. Motor homes get about seven to 10 miles to the gallon.

The Arab oil embargo and fuel shortages of the early 1970s dealt a blow to the industry, but high fuel costs alone failed to make a lasting dent in RV sales in the past.

"This time could be different," BB&T Capital Markets analyst Kathryn Thompson cautioned. "There was such a dramatic increase in fuel prices that it may delay consumers from buying the product."

For now, some RV owners plan to scale back their summer travel itineraries to offset the higher fuel costs.

Retired computer industry professionals Alan and Barbara Lidstone, who own a 33-foot Winnebago Chieftain, lopped a leg off a planned trip to New England from their home in Venice, Florida.

"We were going to go out to Kentucky and Hot Springs and decided not to because it would have added 1,000 miles to the trip," said Alan Lidstone, who with his wife has written a guidebook on RV travel.

More double-income families whose leisure time is limited are using RVs for long weekend trips, according to Coachmen Chief Executive Claire Skinner.

"It is literally a home on wheels," she said from Coachmen's headquarters in Elkhart County. "And in your home you get to do your own thing at your own time."

 
 
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