LAS VEGAS – Tim Hyland has seen his fair share of political turmoil and major market upheaval in his time of leadership at some of the RV industry’s largest floorplan lenders.
So, although he said it remains to be seen how Tuesday’s election results end up affecting the economy, he also acknowledged that the slowdown in manufacturing and retailing RVs over the past year shouldn’t be a huge cause of concern for anybody watching the industry.
Hyland, president of Wells Fargo’s Commercial Distribution Finance RV group, told RV PRO during an interview at the RV Dealers Association Convention/Expo that the slowdown should actually provide some security and confidence in the industry.
“If you look broadly, we saw that there was a little too much inventory,” he said. “What we’ve seen in the last quarter is that dealers have pulled back a little bit on their ordering to move through the inventory they’ve got. I would expect that through the first quarter, maybe second quarter, we would see that continue. Then we should see a return to normal behavior.”
This cautious phase would seem to indicate that dealers indeed learned a painful lesson after getting in deep trouble in the early stages of the Great Recession.
Having gone through that once, most decided to slow down when they found their existing inventory sitting longer than it had over the past five years.
“We watch aging pretty closely. We watch turns closely. When we speak of aging, we usually mean anything over a year,” Hyland said. “We haven’t seen any dramatic increase in product that’s out there over a year. That’s positive. From 180 days to 270 days there’s a slight increase, but again, you will have that if you pull back on ordering. But it’s not a wall. It’s an adjustment. We expect by the end of the first quarter, maybe second quarter it will get back to normal.”
Hyland also said he expects the Federal Reserve to continue to follow its policy of raising interest rates in an effort to keep inflation in check. He said he could imagine rates going up two to three times over the next year at a quarter point per increase.
In light of the recent departure of Ally from the market of financing dealer inventory, Hyland reiterated Wells Fargo’s bullish view of the industry and its commitment to its dealer partners.
“We’re committed to the market,” he said. “We’ve been here almost 40 years. We see value in the industry and we see good things ahead in the near term. We like to think we run a solid business. We know how to follow the cycles and we’re here for the good times and the bad.
“There’s some volatility out there – after all, it’s an election year – but if you put that aside and look at the other factors, things look pretty good.”