October '17

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58 • RV PRO • October 2017 rv-pro.com A F T E R M A R K E T to Sims. But the Recession made many people take a step back and realize there's more to life than "just stuff," and family became more important. "Spending more time with family around a campfire, rather than in a hotel eating out every night, and leaving the digital world behind was a change in consumer mindset," he says. Manufacturers Fine-Tune Supply with Demand RV shipments continue to surge in 2017 to their highest levels ever, and the trend is expected to continue for 2018 for a record ninth straight year, the RV Industry Association recently reported. But the industry also has tempered its output to more closely keep supply in tune with demand, a lesson learned from the latest economic downturn. "The industry experienced a terrific drop," Sims notes. "Compared to today, is the industry still at risk? Or is it risk- averse? One of the major differences is there were many more manufacturers in those days and the market was more diluted, which forced margins to be much shorter and tighter." Today, manufacturers have become more sophisticated in their production numbers – they're not just building to get units into the market. Instead, RV makers are supplying only what they think can be absorbed by the market- place, according to Sims. "The industry isn't forcing consumers to drink out of a fire hose now like it was pre-recession," he says. "Manufac- turers have done a good job of building what people want, and that's been a big change, whereas before, they built what they thought people needed. "Since the Recession, many manufac- turers became much smarter about pro- duction and they didn't overbuild. They built what they could sell and changed the types of models that they offered. They became more efficient," Sims adds. But if supply doesn't meet demand, then consumers begin to look for a rela- tively "new" used unit between one and three years old, which puts pressure on the used RV market and will hold values up – and that's what's been happening the past few years as values have held steady, though with a slight decline, overall, according to Sims. In the case of used Class B motor- homes, NADAguides has incrementally raised its prices, more so by not showing depreciation. While Class B's have maintained their values, Sims adds that there's still demand for larger RVs – just not as much – so long as they're not over-manufac- tured, as some of those Boomers haven't changed their mindset toward smaller units ("Larger RVs aren't the 'flavor of the month,'" he says.) However, there are certain segments, such as diesel pushers, that have expe- rienced more depreciation compared to the rest of the market, as well as different categories within a specific market seg- ment – trailers or fifth wheels without slide-outs, for example, that will depre- ciate faster depending on consumer pref- erence, according to Sims. "There is no silver bullet that enables us to say, 'Yes, the RV market is holding steady,' though in general, it is, but there are segments depreciating a little faster than others." According to NADAguides' "Market Insights" report and its breakdown of "Used Retail Value by Category Study" from 2014 to 2017, RV segments have depreciated in value in relatively varying degrees from their high-water marks in 2015: • Standard towables were consid- erably higher valued in 2015 than they are today, as were fifth wheels and Class A's. • Class C's, at present, are in line with the relative high values of 2015. • Camping trailers, while they dropped slightly in value in 2016, have rebounded closer to their 2015 numbers in 2017. • Truck camper values, meanwhile, are considerably less this year than they where in 2015. Those segment values today that are presently trending similar to 2015 are NADAguides data shows fifth wheel values were trending up as of May-June, but are still down compared to the previous three years.

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