The RV industry, a significant player in the U.S. economy, has experienced a notable downturn in shipments in June 2023. According to the RV Industry Association, total RV shipments for the month amounted to 24,095 units. This figure represents a sharp decline of 46.4% compared to the 44,942 units shipped in June 2022. To put this in perspective, the cumulative RV shipments for the year have decreased by 49.2%, with a total of 164,830 units.
Despite the decline, the RV industry remains optimistic about the future. Craig Kirby, the president & CEO of the RVIA, mentioned in the association’s News & Insights report that RVing continues to be a preferred mode of travel for over 44 million Americans planning their summer trips.
He anticipates a recovery in RV shipments later in 2023 and into 2024, driven by increasing consumer confidence and sustained interest in camping and RVing.
Breaking down the numbers, towable RVs, primarily conventional travel trailers, saw a decrease of 48.3% from the previous June, with 20,670 shipments. Motorhomes, on the other hand, finished the month 30.8% lower than the same month in the previous year, with 3,425 units. Interestingly, park model RVs witnessed a growth of 7.7% compared to June 2022, with 391 wholesale shipments.
He attributed the slump to the aftermath of the coronavirus pandemic, which drastically altered U.S. spending habits. During the pandemic, consumers shifted their spending from services to goods, leading to a surge in demand for products like RVs. However, as pandemic restrictions were lifted and U.S. interest rates began to rise, the RV industry faced challenges.
The Federal Reserve’s decision to increase borrowing costs to combat inflation has also impacted the RV industry. In the same Reuters article, it was mentioned that interest rates on RV loans have risen, averaging around 10% compared to the previous 7%. With a significant portion of RV buyers relying on financing, these rate hikes have naturally dampened their purchasing enthusiasm.
The decline in RV sales is a trend observed in the previous month. As reported by Modern Campground, monthly shipments of recreational vehicles (RVs), mobile homes, and campers plummeted by nearly 50% year over year to date last month.
And in April, total shipments were 31,216, down from 57,192 in the same period of 2022.
Several factors have contributed to this global downturn. As Fastmarkets highlighted in a report, production and sales of RVs soared during the pandemic, but new challenges have emerged post-pandemic. Rising interest rates have also been a significant deterrent for a Canadian 2×3 producer, an essential item in framing RVs. The producer noted that demand drastically decreased when interest rates began to rise, leading to an accumulation of inventory.
Furthermore, a shift in work culture post-pandemic has also played a role. With employers encouraging workers to return to the office and reducing opportunities for remote work, the allure of RVs and the associated lifestyle has diminished for some.
Major RV manufacturers have also felt the pinch. In March, Thor Industries, the parent company of brands like Airstream and CrossRoads, reported a quarterly net revenue decrease of 40%, down from a record $2.35 billion in March 2022, as mentioned in the same Fastmarkets report.
Another factor contributing to the decline is the oversupply of RVs.
The RVIA’s April survey alluded to high inventory levels among RV sellers, indicating that consumers would find many affordable options across all product types.
As highlighted by Motor1.com, many dealerships have an excess of older RV models, making it challenging to introduce newer, less expensive models. This situation has left dealers with the dilemma of how to sell older models that are more expensive than the latest ones.
Despite the challenges, there’s a silver lining. The RVIA believes that RV shipments will start to increase in the latter half of the year. They project North American shipments to rebound to approximately 350,000 units next year.
While the RV industry has faced a significant decline in shipments in June 2023, there’s hope for recovery. Factors like the aftermath of the pandemic, rising interest rates, and an oversupply of older models have contributed to the downturn. However, with the industry’s resilience and the projected increase in shipments, the future looks promising for RV businesses.