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Class C Sales Gaining Ground

Sales of the motorhomes for the fi rst seven months of the year are up compared to 2009 and 2010, and are coming into parity with larger Class A units.

Give this year’s sales of Class C motorhomes a grade of “B.”Sales are climbing. And while the numbers haven’t reached previous highs of a few years ago, there are plenty of positive signs and hope for the future.

Despite rising commodity prices, the struggling economy and tighter reins on financing, shipments of Class C motorhomes are projected to hit 11,300 units this year, according to the RV Industry Association. That’s 800 units more than the 10,500 that were shipped in 2010 and nearly double the 6,100 units shipped in 2009, the market’s recent bottom.

Market data provider Statistical Surveys pegs sales of Class C motorhomes through July at 5,838, which compares favorably to the 5,745 motorhomes sold for the same period 2010 and the 5,237 units retailed during the same period 2009. However, this year’s sales pale compared to the recent market high of 12,650 units retailed during the first seven months of 2006.

“We look pretty good compared to last year, but we’ve had some pretty steep drops from our heyday back in the mid-2000s,” says Tom Walworth, director of Statistical Surveys.

The heyday in Class C sales was sparked by market forces following the 9/11 terrorist attacks in 2001, Walworth says. He cites lower tax rates, lower interest rates and lower fuel prices that “combined to accelerate growth within the motorized segment.”

Gas prices in 2003 were at $1.60 to $1.80 a gallon and interest rates averaged 4.25 percent. While interest rates are dropping, gasoline prices are hovering around $3.50 a gallon.

Class C motorhome sales are becoming increasingly important to RV makers. Indeed, the difference between Class A motorhomes and Class C motorhome sales has shrunk markedly over the past few years (see the chart on page 24). As a point of reference, during the first seven months of 2003, sales of Class A motorhomes totaled 24,140 units – nearly double the 11,127 Class C motorhomes retailed during the same period. This year during the same period, 6,692 Class A motorhomes sold, versus 6,338 Class C motorhomes.

Winnebago has adopted the fuel-effi cient Mercedes-Benz chassis for a number of its Class C motorhomes, including the View (pictured). Although relatively compact in size, measuring less than 25 feet in length, the View still gives RVers plenty of living space.
The Winnebago View 24J model (pictured) features a large bed at the back of the coach as well the standard overhead bed; the company’s new 24M model offers a comfort sofa/ sleeper and an overhead bed. Both units come nicely appointed.

Thor Flexes Its Market Muscle

Through July, the big three in Class C sales were Thor Motor Coach, with a 27.5 percent market share, followed by Coachmen RV at 19.5 percent and Winnebago at 16.2 percent, according to Statistical Surveys.

Thor’s Class C brand market share growth to date over last year is up more than 73 percent, says Mike Savage, Thor’s Class C product manager. He attributes the gains to a bevy of new features, such as mega-storage compartments, new floorplans and fiberglass front caps, among other features.

“Changes in product have helped us a great deal,” Savage says.

The company’s Four Winds line, he says, gives dealers and retail customers “everything from a 19-foot to a 31-foot Class C. When you offer that sort of line-up and you give them that many choices, it really enhances your retail sales because you are hitting every market that you can.”
Prices range from the mid $70s to the high $90s.
But Thor also expects sales to jump in its new B+ brands, the Citation and Siesta.

“We have two new floorplans, 29GB and 27SB,” Savage says. “Both tout very large exterior storage which the B+ market has been lacking. The 27SB floorplan went from 16 cubic feet exterior storage to over 50 cubic feet of exterior storage, more than tripling the previous amount.”

Thor, he says, “isn’t looking for bells and whistles so much. We are looking for utility. Interior and exterior storage is important in these kinds of units.”

Thor also has gone utilitarian on the Internet, which has helped boost sales, Savage says. The renovated website allows potential customers to dial in the specifications they are looking for and a lead system that forwards that data directly to dealers.

“It’s one-stop to get the leads, and the retail customers who are on our website as quickly as possible,” he says. “You don’t want to let those leads fester for too long. If they are not picked up by the dealer in a timely fashion, and get sent to us, we send the leads out to the dealer again. We make sure that we get the leads to dealers so they can make a retail sale.”

Fleetwood’s Top Sellers Are High-End Models

Fleetwood RV reports it is experiencing its strongest growth in the Class C market in its DSL line, which features the Mercedes-Benz chassis. Fleetwood touts the residential-style features that can be found throughout its Tioga DSL (pictured).

At Fleetwood RV, the surprise in Class C sales was that the most expensive model, featuring the Mercedes-Benz chassis, was the top seller. The 2012 Jamboree DSL, for instance, starts at $102,200.

“We introduced our DSL line, and in one month – July – we sold 25 percent of our inventory. That was a real positive for us. That line includes the Tioga, Ranger and Jamboree and Sport DSLs,” says Mark Inkrote, director of sales for Fleetwood’s western region. “We were concerned about the price of it because Mercedes is so much more than our competitors, and it didn’t seem to matter.”

That’s not to say that other Class C models aren’t doing well. For instance, Fleetwood introduced entry-level gas-powered models called the Tioga Montara and Jamboree Searcher, which have also sold well.

“I think what we’ve done is branched out from the conventional Class C’s,” Inkrote says. “The Mercedes did very well. There are two totally different types of customers for us. We have the older customer, more affluent, who likes the Mercedes, and then there is the entry-level customer looking to get into the lifestyle.”

The Mercedes brand, although higher priced, comes with brand name equity, Inkrote says.

New features have added to Fleetwood’s Class C sales, Inkrote says. For example, there’s the gas-powered 28Z with a rear slide and a drop-down queen bed that comes out of the ceiling, giving the unit two queen beds. Putting a queen bed in the ceiling, he adds, gives the models (which run in the $80s) a full lounge.

“Innovation and versatility in that product was a real boost with the rear slide in the Ranger and Sport versions,” Inkrote says.

To address storage issues, all Fleetwood motorhomes come with full basements – a design taken from its Bounder product line.

While Fleetwood is in major markets, Inkrote says the company wants to expand into smaller markets – mid-sized cities such as Wichita, Kan.

And in the future, exports beckon.

“There are more and more opportunities for that,” Inkrote says. “We get more people asking us to export our products. We get calls from Saudi Arabia and that part of the world all the time. We also get calls from China, Australia, Switzerland – not necessarily large numbers, but manufacturers in those areas who used to say, ‘We’re not interested’ (now) say that they are interested.”

Winnebago Sees Demand Growing

At Winnebago, positive signs abound when it comes to the Class C market, according to Russ Garfin, director of product planning. Specifically, he notes that attendance at Winnebago’s shows has been up and there are signs of a pent-up demand.

“It’s what is going on in our Class A’s as well,” Garfin says. “People who come to the shows have a really good attitude, and we think things will improve as the economy improves. Consumer confidence is key in our industry.”

Financing, he adds, seems to have loosened up a bit, and shows at Hershey, Pa., and Elkhart, Ind., served as signs that better times might be coming.

“Certainly we love the Hershey show and we had a neat experience at Elkhart,” Garfin says. “Our product seems to be very well received by our dealers and customers, so we’re not constrained by anything product-wise, especially in our Class C line-up. It’s pretty strong.”

New floorplans have boosted sales in Class C motorhomes at Winnebago. “That’s one thing that is very interesting, how well the Premier is doing,” Garfin says.

The gas-powered Access and Access Premier runs from $68,741, to $92, 301. The Class C lineup also includes the diesel-driven View, which is priced in the high $90s; and the View Profile, a low-six figure model. Winnebago’s Itasca brand offers a number of similar models, including the Itasca Navion and Navio iQ, which are built on the Mercedes-Benz chassis and are priced from the high $90s to the low $100s.

Downsizers are also driving business, he adds.

“We have a high rate of downsizers buying into our Class C’s – people who like the Winnebago brand or who had a Winnebago in the past or are moving out of another brand and look at the features or quality of the products that we have. I think we offer a lot to those types of customers that you won’t find in any entry-level Class C.”

Thor Motor Coach has emerged as the leader in market share in the Class C category, which company officials attribute in part to being able to offer units measuring from 19 feet to 31 feet. Prices for those units from the mid $70s to the high $90s.

Of note among floorplans, he says, are those with queen beds, such as the 26Q, with its walk-around bed. Winnebago also positioned televisions directly across from the most comfortable seating and added swivel seats in the cab. Such seemingly minor, but useful changes, can make a difference in sales numbers.

“That’s a big deal, if you can swivel those cab seats,” Garfin says. “They’re very useful for somebody who wants to watch TV or read a book. It gives you much more flooplan functionality in a Class C.”

High-tech flexibility also has been increasing in Winnebago Class C motorhomes, Garfin says. Winnebago has made it easier for buyers to upgrade as technology evolves, such as easy ways to upgrade Blu-ray players and game consoles.
“That’s a direction you will see in the future for us, to get the latest gadgets,” Garfin says.

To combat high gas prices, Winnebago has adopted the more fuel-efficient Mercedes-Benz chassis, which comes with a variety of floorplan options, and developed a lower-profile design.

Next year calls for much of the same in Winnebago’s Class C motorhomes, from which it derives 44 percent of its revenue. New floorplans include the walk-around queen bed, a powered sofa that can be made into a queen bed, and a whopping 45-percent increase in storage.

Rear trunks will add more space and make it easier for customers to hook up in campgrounds while at the same time boosting storage.

“One of the things that work well for our dealers is that they know all of our products are built the same way. It’s unique in our industry. The way the coach is put together is done the same way we put together our Class A,” he says.

Monaco Sales Double

Although primarily known for its Class A motorhomes, Monaco RV says its Holiday Rambler Aluma-Lite has been very well-received after being introduced to the market in January. Company officials tout the model’s open floorplan, ample storage and roomy interior.

The industry-wide uptick in sales of Class C is enough to spur more development in that segment at Monaco RV, says Scott Jacobson, national sales manager.

More promising are the numbers for Monaco itself. “My sales are up over 100 percent,” says Jacobson, who declined to provide detailed figures. “I just started building this a year ago, but it’s that C market that has increased. It’s the start of our new product and Monaco is outperforming the market.”
Monaco introduced its new Monaco, Holiday Rambler and R-Vision brand in January at the 2011 Florida RV SuperShow in Tampa, Fla. Holiday Rambler motorized division debuted the full-wall slide Class A and Class C Aluma-Lite models.

“Dealer feedback has been great in this area,” Jacobson says. “They hear from retail customers every day and when they share that there has been a tremendous increase in smaller, fuel-efficient motorhomes, I think that’s why we are seeing Class C sales for the industry are up almost 2 percent year to date.”

Nationwide, Monaco RV has more than 80 dealers. To help boost sales, Holiday Rambler promotions have offered coupons to retail customers to spark new business for the Aluma-lite.

“Not only does that help us promote the Aluma-lite Class C’s, but it allows us to help drive specific retail buyers onto our dealers’ lots looking for the product,” Jacobson says.

Incentives ranged from $500 to $3,500, depending on the model, he says. The price for those models ranges from $73,560 to $93,967. 
Aluma-lite sales have doubled over last year, in part because of its fuel efficiency.
“As our dealers have relayed, consumers are coming in and looking to downsize for many reasons, but a leading reason is fuel economy. I believe that is why our 23RB has outperformed,” he says.

The popularity of that model is also driven by its open floorplan, ample storage and roomy interior, he says. Also helping is Monaco’s pairing with Navistar, which Jacobson says has led to more modern design and Navistar’s fuel efficient engines.

“When you couple that with the Roadmaster chassis (on Class A diesels), Holiday Rambler has become the most vertically integrated RV manufacturer in the market today,” Jacobson says. “Gone are the days of having to go to three different service facilities to have work done. Now it is a one-stop shop to have service done on chassis, engine and box.”

Next year is shaping up as a year of continued growth for Monaco, Jacobson says. The company will concentrate on new design features, fuel economy and floorplans.

“We see 2012 as a big year for growth in market share and continuing to roll out state-of-the-art motorhomes,” he says. 

As can be seen from the chart above, Class C motorhomes in recent years have come into sales parity with Class A models. That is a notable development given that Class A motorhome sales were nearly twice the size of Class C sales earlier this decade. (Chart reproduced courtesy of Statistical Surveys.)