Class A Gas Market Advancing
As any owner of a Class A motorhome will tell you, once a coach gathers steam going downhill, slowing it down requires a sure hand and skill. Only a few years back, the market for Class A motorhomes was just like that, rumbling down a steep hill with no end in sight.
Well, the times are changing.
The RV Industry Association predicts that 13,400 Class A motorhomes will be shipped to retailers this year, up 300 units from the 13,100 that were shipped in 2010. That’s a slight bump for this year, but a monster leap from the 5,900 units that were shipped in 2009, when the market hit the skids.
RVIA doesn’t break down the units shipped by gasoline or diesel motorhome categories, but Grand Rapids, Mich.-based Statistical Surveys does, and the market data firm’s numbers show a mixed bag for Class A sales thus far this year. On the positive side, as of May (latest data available), sales of Class A gas motorhomes were up 11 percent compared to the same period 2010. Meanwhile, sales of diesel units were down 20 percent.
Fleetwood RV’s Bounder motorhome continues to be the manufacturer’s top seller in the Class A gas market. Customers appreciate the coach’s many amenities, its rich interior décor, its size (33 feet to 35 feet) and its price point ($110,000 to $140,000), according to Fleetwood officials.
The fact that gas coaches are selling better than their more expensive diesel counterparts is not surprising given the tentative nature of the country’s economic recovery, and the fact that banks are still cautious when it comes to lending – although, again, the situation has improved notably from 2008-09.
“The finance world has changed a lot of this,” acknowledges Lenny Razo, director of sales for the eastern region for Fleetwood RV. “It is much easier in today’s environment to get financing on anything below $150,000 than anything over that amount.”
Manufacturers Jostle for Market Share
In 2010, the top five players in the Class A market were: Winnebago, 23 percent; Thor, 21 percent; Fleetwood, 17 percent; Forest River, 15 percent; and Tiffin, 8 percent.
On the whole, those top five manufacturers were seeing positive results in the first half of the year when it comes to sales of Class A motorhomes. According to Baird Equity Research, Tiffin’s sales were up 21 percent for May and 21 percent for the year as of May. Thor Industries sales were up 17 percent in May and up 21 percent for the year, and Winnebago saw sales in May jump 9 percent, up 21 percent for the year. Forest River has had mixed results, down 7 percent for May, but up overall to date 4 percent.
Fleetwood had a rough May, with sales down 30 percent and is fighting a 25 percent slump for the year so far. Still, Fleetwood lands at fourth in market share at 12.8 percent, down 4.2 percent year over year.
Still, Razo remains enthusiastic about Fleetwood RV’s prospects moving forward when it comes to competing in the Class A gas category. He notes the company’s primary goal isn’t about selling volume based upon sticker price, but on offering value.
“We always say that we build products for RVers, which means we may not always get the first-time buyer who is looking for the best price,” he explains. “The good news is that once they have had a challenging experience in a lower-priced product, they often look to Fleetwood for their second purchase because they want a more reliable, higher-valued product.”
There’s lots of change in the offing at Fleetwood. Marketing has been ratcheted up and modernized as the company takes aim at the younger market, Razo says.
“Over the next few months, we’re going after the new buyer. You’re going to see a lot geared more to that age and that new group,” he says. “We’re trying to educate them about what RVing is really about. We’re trying to excite them at certain shows and get our name out there.”
That younger market, young families and singles, tends to like high-tech, Razo adds.
“Typically the younger buyer is the young family – somebody with a couple of kids, looking for bunk models, and then you have the younger buyer who likes to go out to the dunes or the desert, so they need just enough storage for the weekend and their bikes,” he says. “We have different layouts for that. But we are trying different things, trying to find out what they like.”
Fleetwood’s marketing strategy includes a new website that will allow customers to shop “intuitively” for the coach that works best for them, gathering information to better understand customer needs, and plenty of social media – Facebook, Twitter “and other platforms so we can speak directly with consumers and gather feedback immediately,” Razo says.
As this article was being prepared for publication, Fleetwood RV was anxiously looking forward to debuting several new floorplans, including a new 36-foot Southwind and a new 32-foot Storm, at its National Dealer Meeting set for Aug. 23-25 at the company’s facilities in Decatur, Ind.
Dealers also can expect to see some changes in the Bounder series, which is Fleetwood’s top seller is the Class A gas category. Razo says buyers continue to be impressed with the model’s variety of options.
“I think one big reason is it’s from the 30-footer to the 35-footer, and it’s one of the best-known in the industry. It’s also got a good range of options,” he says. The price runs from $110,000 to $140,000.
Forest River Sticks with What Works
At Forest River Inc., it’s pretty much business as usual. Buyers are not balking at the bigger models, and the top sales getter continues to be the Georgetown, says Craig Fawcett, Forest River’s Georgetown division sales manager.
“We have two different price points, the ‘value edition’ and the standard Georgetown, which is more expensive,” he says. “Right now our sales are pretty much split 50-50. But the No. 1-selling floorplan is the standard Georgetown.
That floorplan is a two-person coach with opposing living room and kitchen slide-outs, Fawcett says.
“It’s all about living space, and that happens to be one of our biggest and more expensive models. You hear about the trend toward downsizing, and we hear about that and see it to a certain extent, but we still sell our big, expensive coaches.”
Forest River’s top seller in the Class A gas market is the Georgetown, which comes in a “value edition” and a standard model, which is the more expensive version. In all, Forest River offers eight floorplans for its Georgetown models, all of which feature an array of amenities that consumers expect when purchasing a Class a motorhome.
It’s the difference, it seems, between the middle-class buyer and the upper-class buyer. The middle-class buyer, Fawcett says, “is not present in today’s market for obvious reasons. But the people who can afford to buy, a lot of them are buying up the big coaches.”
While Fleetwood is aiming at the younger market, Forest River continues to find success with the older demographic, which continues to make up the bulk of its buyers.
Younger buyers, Fawcett says, were more active until late 2008, when the market dived. They haven’t come back. At least, not yet.
“We don’t market like most of our competitors,” Fawcett says. “Most of our competitors are gearing their marketing toward, or have tried to reach, the retail customer. While that’s OK for maybe GM or Ford, this is a totally different scenario in the RV industry. We have not changed our basic premise on marketing, geared toward wholesale and product.”
And, while Forest River would like to see improved gas mileage, the Class A gas market is limited to a single chassis by Ford with only one engine and one transmission offered, he adds.
Cutting weight, says Fawcett, would result in minimal gas savings at the expense of trimming the features that draw buyers in the first place.
“When you are spending a lot of money on big coaches, (fewer features) is not what people are looking for,” he says. “You spend a huge amount of money and sacrifice features in order to save very minute amounts of gasoline. Most consumers are well educated and well read and they understand this.”
While the status quo is paying off for Forest River, Fawcett nonetheless sees change ahead. He just doesn’t like to make predictions very much.
Besides, some of the more recent trends haven’t particularly paid dividends, compared with what it’s cost to develop them.
“I can tell you that the companies that have tried to change up things by using more expensive, more fuel-efficient chassis, have not really been successful,” Fawcett says. “The exception would probably be Tiffin and their Breeze product, but they are probably the exception to the rule in a lot of areas. Everybody else trying to institute ‘out of the box’ hasn’t worked.”
Changes Ahead for the Class A Market
Products in the next few years will remain similar to today’s offerings, but they will be driven by innovation aimed at consumer convenience, floorplans and more residential-styled consumer items, Fawcett says.
“The old way of building a basic RV with the basic RV look and interior will give way to more sophistication,” he says.
That, he adds, is where Forest River excels.
“For instance, with the September Open House, Mr. (Peter) Liegl was thinking ‘outside the box’ and wanted an alternative to traditional trade shows and came from the ground up with this concept. He made it work and the whole industry has followed. It’s that kind of thinking that is going to be necessary to thrive and succeed in this business in the future.”
Razo foresees a future with changes to the engines and structures of Class A motorhomes. He also predicts that buyers will “go large” once again.
“I think that we are too smart to be able to put people into space and then can’t figure out how to get more than 8 miles a gallon on a diesel coach,” he says. “We will do it, but the focus just hasn’t been there.
“We’ve always seen this industry evolve and go up and down.”