The trending Type A comeback
Despite three record-breaking years in a row for the RV industry, Type A motorhomes have seen some tough sledding in a market buffeted by rising gas prices, lower interest rates and declining home values. But all that may change soon, if 2008 model introductions are any indication. In 2004, the industry sold 71,800 motorhomes which represented 19.4 percent of all RV deliveries. Type As accounted for 46,300 of those units or 12.51 percent of all RVs delivered to dealers. In 2005, a total of 61,400 motorhomes were delivered representing 15.97 percent of the total market. Type As represented 9.86 percent of all units delivered in 2005. Last year, 55,900 motorhomes were delivered to dealers, which equal 14.32 percent of the total market. Type A deliveries represented only 8.37 percent of all units delivered to dealers.
While total deliveries may have set records year after year, dealers selling Type A motorhomes lost sleep and a significant percentage of their annual profitability. Many dealers abandoned the motorhome market – something they may regret this fall. This year Type A deliveries are the bright spot for the industry. Through March, deliveries were up 3.4 percent for the year while nearly all other market segments were reporting near double-digit declines or worse. In fact, 14,600 motorhomes were delivered during the first quarter, which represents 15.6 percent of all deliveries. A total of 9,000 Type A motorhomes were delivered so far this year, representing 9.62 percent of the entire industry — and nearly tying 2004 delivery levels. What’s behind the change? There are two reasons, both dealing with chassis. First of all, Workhorse introduced its highly flexible Universal Fuel Option (UFO) chassis at last year’s Louisville show and manufacturers are just starting to get product onto dealer lots. This chassis gives buyers the option of selecting either a rear diesel engine or a rear gas engine. Either way, the rides are extremely quiet and the units remarkably easy to handle. Best of all, the completely flat floors offered by the UFO chassis opened up whole new avenues for RV designers to create innovative floorplans without taking into consideration the traditional humps and bumps that have greatly limited their design efforts.
Combine a flat floor with a full wall slide and consumers apparently have fallen in love with Type A motorhomes all over again. Not to be outdone, Freightliner today introduced its XCL Series Maxum chassis at the Winnebago Dealer Days event in Las Vegas. It’s a modified raised rail chassis that is seven times stronger than typical raised rail units. Its lower center of gravity improves ride and handling, especially with a 60-degree wheel cut. But the real power behind this unit is its storage capability. The Maxum’s inverted design creates a total of 220 cubic feet of storage underneath the coach. That’s a lot of space for golf clubs, folding chairs, suitcases, pull-out slides, charcoal bags and sassy children. Did I mention that the Maxum is also a diesel chassis which not only allows consumers to save some money at the fuel pumps, it also gives Winnebago a chance to significantly improve its performance in the diesel market where it’s share of sales is half its industry-leading gas market share. In an industry which often considers changing interior colors and exterior paint schemes to be model year innovations, it’s nice to see that manufacturers and suppliers are working together to make things happen in a way that excites consumers and drives traffic to RV dealerships. While Winnebago Industries is often on the leading edge of product innovation, I’m willing to bet that other manufacturers will quickly follow suit to create units that fully capitalize on the floor plan options and basement storage capacity these innovative chassis offer. This year’s National RV Show may be the site of some breathtaking innovation that has the potential to stop the stall of Type A sales and reinvigorate a buying public hungry to travel in style with all their toys.
May 19th, 2007 at 8:10 am
These numbers are impressive in another way. Although you speak of the technological advancements of the Workhorse UFO and Freightliner XCL chassis offerings, none of these figures reflect sales of motorhomes built on these two platforms. The UFO, which I test drove at FMCA, is just showing up on dealer’s lots and the Freightliner was just introduced at the Winnebago Las Vegas dealer event.
So there is even more room for optimism as these new platforms start to get another group of buyers excited about their features and technology improvements.
The UFO is quite an achievement. With the gas engine in the rear of the coach, you have to look at the instrument panel to even know it is running. You can hear a pin drop with this configuration and will probably have to start listening to your co-pilot as you move on down the highway! You certainly will be able to hear everything he/she says, so you won’t be able to blame the noise factor anymore. Heck, this could do wonders for RV marriages.
We may also be seeing some pent up demand to trade in the old and get something new. We obviously had a lot of RVers sitting on the fence the past few years and holding on to units longer than they would like due to gas prices, the war, and the economy. We have accepted and adjusted to all three conditions and people are moving on with their lives.
Traveling in a Type A motorhome is truly a great experience for all that they have to offer, and dealers should jump all over these numbers, post them in the showroom, send our direct mails and get on the phone with every customer they have that owns an RV and let them know that there are a lot of reasons to buy right now, and here’s the proof to show to them.
Roll on …..
May 16th, 2007 at 6:12 pm
Although Ralph may be a little off topic for Greg’s fine article, I agree 110% with every point that Ralph makes.
I would add that the Internet whores are not exclusively selling motor homes, by any means. The prices that new 5th wheels and travel trailers are being dumped at are just ridiculous!!
I do disagree with the notion that radical new designs will trump $3.00- $4.00/ gallon fuel concerns with the retail purchasers. I truly hope I am wrong.
May 16th, 2007 at 8:54 am
Most Motorhome Dealers have been in the business for many years and most started out small with towables and grew over the years to accomidate their customers request for larger units. Being a Motorhome Dealer in todays market is a risky business due to the fact of “internet dealers”
coming out of the woodwork every where. These companies could care less of the customer and only want to make a quick buck and then send you off. They offer little no none for inventory,no service after the sale and no parts department. They tell you to call the manufacture if you have a service issue with your new coach and the manufacture will send them to a Full Servicing Dealer in their area. This Dealer has made no profit from the sale but is expected to service a customer he did not sell in order to please the manufacture and the customer. These manufactures who set up these internet dealers should be dropped by us Real RV Dealers who care about the customer and have been taking care of all customers for decades and will be here taking care of our customers for many years to come and are not just here to make a fast buck. If there is someone to blame for the decline in Motorhome Dealers lets point the finger at the manufacturer who sets up these “internet dealers” to gain market share and could care less about the dealer who has been selling their product for them for years and servicing the customer.
May 15th, 2007 at 5:06 pm
Hello Greg,
Good article…. However allow me to inject one other factor into the decline of large Motorhomes. When I look at the overall relative spending for large ticket items (RVs, expensive cars, large boats, etc.)one of the most decisive metrics is the amount of money available for discretionary spending. For example…
Discretionary spending accelerated to a peak about ten years ago and began a gradual decline about three years ago. Much of discretionary spending came from retiring folks who decided to “sell the farm” and invest in a large Motorhome. Those retiring folks represented a segment of the economy that had worked hard and long and thus wanted a less strenuous life style. RVing was the answer for many. Many of us “old timers” came out of just that time span.
I believe that what we are seeing now is the next segment of “retiring folks” who may not want to “sell the farm” as of now, but invest in a life style that brings both a relaxing and unwinding time, that is linked to an affordable investment.
RVers like new and impressive things. Thus, the Rear-Engine Gas (REG) arrangement will begin to lead the sales for Class A units, if for no other reason that pure economics. I personally home that the diesel engine builders hear that “drum beat” and look at ways to reduce the cost of their products. It would also spur the sales of Class A units.
Gene