If there's any better symbol of the U.S.A. than the Winnebago, we're unaware of it. Nothing says "America" like a gas-guzzling McMansion on wheels.
Unfortunately, two trends have now shoved recreational vehicle sales off a cliff.
- $4.50 gas (7-12 mpg)
- Strapped consumers ($20,000 - $200,000 sticker price)
According to Statistical Surveys, a Michigan market research firm, sales of class-A motorhomes, the biggest vehicles, fell by 31.3 per cent in the first five months of 2008 compared with a year earlier. This included a 43 per cent plunge in May.
“This cycle has been particularly nasty,” says Craig Kennison, analyst at Robert W Baird. He estimates motorhome registrations will tumble to 35,000 units this year, down almost half from their 2004 peak, well below the trough of the industry’s past two downturns.
Oregon-based Monaco Coach, one of the biggest RV makers, on Sunday reported an unexpectedly steep second-quarter loss of $9.7m, compared with earnings of $4.5m a year earlier. Revenues slumped almost 40 per cent and the company said that it had sought a waiver on its loan covenants. Monaco shares, trading at $2.26 last week, have lost more than four-fifths of their value in the past year.
Winnebago Industries’ chief executive Bob Olson said last month “it is an understatement to say that we were not pleased with our operating results”. The Iowa-based company reported a three-quarters drop in net income and an operating loss for the quarter to May 31.
