RV Weekly

The RV industry has been eyeing Baby Boomers for years as a potentially huge revenue source. Estimated to be 78 million people strong, if just one in 20 Boomers enters the RV industry in the next 10 years, we’ll see an influx of 390,000 customers per year. That’s the potential to double annual RV sales.

BoomerEyes, a Boomer research and demographic intelligence authority, has partnered with JWT BOOM to track the lifestyles, attitudes and values of this influential segment with the annual Boomer Heartbeat research monitor. Their in-depth study explores Boomers’ views and perceptions on life, family, work, finances, health and wellness and technology.

“The breadth and depth of Boomers’ diversity creates a fascinating mosaic of their distinct lifestyles, attitudes and behaviors,” says Anne Wall, senior vice president of C&R Research. “Boomers are unlike any generation before them, which is why it is critical to understand the factors and influences that shape their values and views.”

Their recently released study offers a wealth of data and information about the Boomer generation. For example, nearly four in 10 Boomers are now empty nesters — and one-third of empty nesters are new to that experience and looking to spread their wings. With the kids gone, empty nesters report they have an extra $315 per month to spend on discretionary things like RV payments.

Proving that Boomers are ideally suited for the RV lifestyle, the study shows that 21 percent cite spending time with family as a top priority and 18 percent seek travel adventures. Next to financial freedom, time with family and travel are the top three Boomer dreams.

Healthy lifestyles and diet are a major concern for one in five Boomers. The ability to make their own healthy food when traveling should be a big selling point in motivating them to buy an RV.

I heard some RV dealers are ratcheting down their Internet efforts. That’s a huge mistake. The study shows that 96 percent of Boomers use computers at home — nearly three-quarters of them are heavy home Internet users. They are also opinion leaders with one in three being sought out by friends and family on how to incorporate new technology into their lifestyles. Boomers use the Internet for:

• Shopping (69 percent)
• Research (69 percent)
• Booking or planning travel (60 percent)
• Shopping for travel (58 percent)

Don’t upset the Boomers! About one third report they actively participate in online communities (chat rooms and forums) and one in 10 already maintain their own blog. What a great opportunity for quality dealers and manufacturers to garner some online exposure.

If there is a dark side to the Boomer generation, that has to be finances. About 62 percent of Boomers say their household debt is above average. Surprisingly, 42 percent report invested assets less than $100,000 which will greatly impact their ability to retire as comfortably as their parents. Yet they’ll have a much better time than the 26 percent of Boomers who report they have nothing saved for retirement.

“Boomers wield significant influence and clout on our nation both culturally and economically,” says Lori Bitter, senior partner at JWT BOOM. “Spending $2.3 trillion annually, Boomers are the largest and most lucrative segment in today’s consumer culture.”

For more information about BoomerEyes go to http://www.crresearch.com/

While finances appear to be a problem for many Boomers, it’s also apparent these folks will shop til they drop. It’s a market segment that deserves respect and lots of attention. In fact, if history proves correct, Boomers will demand both.

Cheap Chinese tires missing a safety feature are being blamed for numerous traffic accidents in which several people have already died. The safety feature in question is a six-millimeter layer of rubber that is supposed to be placed between the steel belts to strengthen the tire. But Foreign Tire Sales, which imported the tires, says Hangzhou Zhongce Rubber Company removed the safety feature without notifying its U.S. distributors, according to ConsumerAffairs.com.

The tires are manufactured by Hangzhou and imported by Foreign Tires Sales, Inc., of Union, N.J. The tires were sold under brand names Westlake, Telluride, Compass and YKS. This particular safety alert affects light truck tires only. As many as 450,000 tires may have been imported. Great background information can be found by clicking here.

However, a Washington state RV dealer alerted me to a problem he is having with tires sold under the Mastertrack brand. He said the tires were manufacturered in Elkhart and sold exclusively to RV manufacturers. “The sidewalls are cracking and, in some cases, are bulging out which could ultimately create a very serious blowout situation.”

Ironically, as he was typing the e-mail to me about this issue and another affecting the RV industry, a 20-foot Puma trailer was delivered to his dealership with damage caused by a blowout on a Mastertrack tire.

According to Foreign Tire Sales, tires manufactured by Hangzhou were also sold by the following distributors:

• Tireco, Compton, Calif.
• Strategic Import Supply, Wayzata, Minn.
• Omni United USA, Inc., Jacksonville, Fla.
• Orteck International, Inc. of Gaithersburg, Md.
• K&D Tire Wholesalers LLC, Carlsbad, Calif.
• Robinson Tire in Laurel, Miss.

Although the Washington dealer assumed the Mastertrack tires were manufactured in Elkhart, I can’t find any information about the company or brand online or in any RV industry directories. There is some chatter on RV consumer Web sites about tire failures and some messages mention the Mastertrack name. But, if anyone knows anything about this company or its products, please e-mail me at editor@rvtradedigest.com.

It’s cliche to suggest that the RV industry rides on the quality of its tires. What may appear to be low-cost alternatives do not always come with an acceptable quality in terms of safety and performance. This is especially evident when an RV dealer receives units bearing bulging or flat tires following a 2,200-mile trip. 

Caveat emptor - Let the buyer beware!  But, in this case, the buyers are RV manufacturers and dealers.  I agree with the RVer posting a message to a consumer forum who noted that ”tires are a bad place for a manufacturer to cut costs.”

Addressing more than 250 people at last week’s Forecast 2008 luncheon in Washington, D.C, the president of the RV Industry Association fired a warning shot at RV dealers in reference to their increased interest in seeking franchise protection.During the Committee Week luncheon June 12, Richard Coon identified several key issues that are likely to impact the RV industry. One of them was dealer franchise laws.

“Since 2005, we have been working on 32 different franchise deals going through states (legislatures). In 2007, we have 61 different franchise bills including changes to existing laws,” he explained. “RVIA’s government affairs staff is overwhelmed in trying to keep on top of this issue.”

Coon noted that most of the legislation sought requirements that manufacturers repurchase unwanted inventory, provide full retail price on replacement parts and serve as a “full source” supplier in dealing with warranty issues.

My worry about all this is that it infuriates our members,” said Coon. “Manufacturers and suppliers are getting upset over this issue. It impacts the work we are trying to do to improve customer satisfaction. It turns us off from wanting to help the dealers.

”I warned the dealers at the RVDA board meeting this morning. All it takes is one crazy dealer to upset all manufacturers so badly that all cooperation goes down the toilet,” said Coon. “It would be a shame if that happened. If dealers see franchise laws as a way to benefit them going forward, we will have to adjust staff and money spent in that area to keep up.”

Several people in the meeting room were shocked at Coon’s not-so-veiled threat that a single RV dealer could upset all manufacturers so badly that industry cooperation would “go down the toilet.” More importantly, they were offended by the idea that this issue turns off manufacturers and suppliers to the point they may no longer desire to help the people who sell their products.

Do Coon’s comments suggest that anyone who dares disagree with RVIA’s stated position on any issue for any reason commits some type of detestable heresy? If the association is going to consider any type of discourse or opposing agendas as insubordination, it causes me to wonder who is risking industry unity.

It seems to me that whenever iron sharpens iron sparks fly, but when the process is over, both tools are stronger and sharper than they were before. Honest and open dialogue regarding this issue should take place and should be encouraged.

If dealers feel they need franchise protection, let them air their reasons why. Personally, I think it’s a mistake to turn the RV industry into a collective of franchises that could, in turn, severely limit a dealer’s ability to market and compete in a free enterprise system.

Clearly the main issue is the reason why dealers feel they need franchise protection in the first place. If dealers have indeed proposed 61 separate franchise laws to elected officials around the country, to me that signals an underlying problem that should be brought out into the open, debated and resolved. Most small business owners I know wouldn’t try to get the government involved in any aspect of their business. Apparently, RV dealers feel they have their backs against the wall on several issues and can’t get their voices heard in any other way.

Folks, if state legislatures are going to contemplate franchise-like protections for RV dealers, the debate is already underway in a very public forum – just not in this industry. The discussion, unfortunately, is taking place in committee rooms and legislative chambers around the country.

I know many dealers are upset with the requirement they must load up on inventory or risk losing their ability to carry a particular manufacturer’s product line. But some manufacturers are upset their dealer partners don’t willingly inventory all the different floor plans created to target specific markets and price points.

I know many dealers are upset that other manufacturers don’t follow Winnebago’s example by offering a 40 percent markup on all replacement parts. The dealers rationalize that if Winnie can do it and still turn a profit quarter after quarter, why can’t the other OEMs? But I know manufacturers and suppliers are upset that dealers don’t stock adequate inventory of replacement parts to ensure that their mutual customers can be cared for in a timely, efficient and cost-effective manner.

Dealers want guaranteed and protected territories. But manufacturers want the ability to ensure their products are aggressively sold. If an OEM’s data shows a market can bear the sale of 100 fifth wheels a month and their dealer is selling only 20, shouldn’t the manufacturer have the ability to make a change?

Does this industry really want to see franchise laws put in place in all states? It will greatly increase the burden on manufacturers and suppliers to ensure that they comply with a minutia of regulation that will vary from one jurisdiction to another. It will also give manufacturers and suppliers unprecedented ability to control independent RV dealers in order to “protect their brand.”

The bottom line is this. RV dealers are obviously upset enough about something that they feel their only recourse is to take the issue to state legislatures to get the relief or answers they seek. It would behoove the industry to listen to the reasons behind the dealers’ actions rather than firing shots across their bow threatening their very livelihood if they don’t tow the industry’s unequivocal “official” line.

Have people forgotten that nothing – not one thing – can happen in this industry without the cooperation of independent RV dealers who sell and service RVs assembled by manufacturers, and who stock and sell replacement parts provided by suppliers?

Few people will argue with the success of the Go RVing campaign. The award-winning marketing effort spearheaded by the RV Industry Association has built awareness of RV use among millions of potential buyers. It has succeeded in lowering the age of average RV ownership by 15 years as younger families are attracted to the market. The advertisements have generated countless millions in additional free advertising.

Thanks to Go RVing, RV use is hip and cool, and ownership is a dream to which millions of Americans aspire to reach.

What’s baffling to me is the lack of dealer participation in the program. Only about 600 RV dealers fork over $250 per year to become official “Go RVing dealers.” Those who do invest the money get access to an online ad builder features and a professional image library. They also receive official campaign literature and posters which allow the dealers to tap into the national campaign at the local level.

Even with these tools available, surprisingly, only 204 ads have been built. 1,336 images downloaded and 15 customized TV spots have been created for dealers. Why aren’t they taking advantage of these exceptional marketing tools?

Official Go RVing dealers also get access to leads of potential buyers who visit www.gorving.com. RVIA says dealers have downloaded more than a million leads so far this year. To get those leads RVIA will invest nearly $15.8 million in advertising. Yet, the number of leads being downloaded by dealers has declined compared to last year.

Amazingly, less than six in 10 official Go RVing dealers have taken the time to even download the names of their potential customers.

Several years ago, RVIA collected the leads and mailed them to dealers MONTHS after the consumers were mailed a video promoting RV use. I believe the leads went out only three times a year. Dealers complained that the data was too outdated to be effective.

Today, RVIA makes name, address and purchase intention data available within 10 days after a consumer visits the Go RVing website. Ten days may seem to be a long time, but it’s within days of when consumers actually receive their free DVD.  We don’t want dealers following up before consumers have a chance to view the informational video, do we?

But now that RVIA has met dealer demands by proving quick access to people genuinely interested in learning more about the industry and its products, dealers seem to be dropping the ball.

Some people have started to question the effectiveness of the lead generation capability of the program. They rationalize that spending $16 million to get less than 1 million leads works out to about $16 per lead which is a pretty expensive way to populate a mailing list.

What people fail to understand is that the ability to get leads from interested buyers is a byproduct of the overall campaign. Lead generation was never the goal of the campaign; building awareness of the industry and its products has always been the primary purpose of Go RVing.

Yet, I’d be interested in knowing why dealers:

1. Don’t invest to become Official Go RVing dealers
2. Don’t download the leads at all
3. Download the leads, but fail to follow-up with consumers

Failing to tap into this highly-effective, highly-visible campaign seems to be a major marketing blunder by the very people for whom the entire campaign was designed to benefit.

Fleetwood RV officially opened its new manufacturing facility in Mexicali, Mexico, this morning to signal a new era in the construction of recreation vehicles. But, when the ribbon was cut, it may also have opened an entirely new market for RV sales.

Following the press conference in which the ribbon was cut and speeches made congratulating Fleetwood for selecting Mexicali as the location of their new plant, I had a chance to talk with Baja California Governor Eugenio Elorduy Walther. The governor was enthusiastic about Fleetwood’s plant opening for several reasons.

First, he was happy for the job opportunities the plant created to employ people in the community. The Mexicali region is staking its future on the ability to attract and retain manufacturing jobs not only from the United States, but from all of Mexico as well.

Governor Walther was also happy because the plant signaled the official start of the recreation vehicle industry in Mexico. “I think the Mexican market is ready for these types of leisure vehicles,” he explained. “Baja has always had a strong tourism industry. I think the Mexican people will see these vehicles as a way to relax and be with family.”

Someone should sign this guy up as an RVIA spokesperson. The governor is a former auto dealer. In fact, when his term is up in a few months, he intends to return to the business world. Walther apparently sees more opportunity in business than in politics — an idea I wish Americans could import to Washington.

“Having Fleetwood open a manufacturing facility in Mexicali puts us on the map for the entire RV industry,” Governor Walther added. “This area is an important location for promoting all of Baja, not just for people to visit but for companies to bring jobs.”

The staff at Fleetwood had nothing but positive things to say about the workforce they encountered in Mexico. Apparently, business owners work with politicians who work with technical schools to identify opportunities for people to work. Then they each go about turning those opportunities into reality.

The technical schools train to a curriculum developed by colleges who interview business leaders and visit the factories to view the processes necessary to get the work done. At Fleetwood de Mexico, most of the line supervisors have degrees in industry engineering. That promises to greatly increase the efficiency of the manufacturing process as well as the quality of units produced.

The mayor of the community as well as the governor both have solid experience in running businesses, not in sitting in some political science lecture hall. That means they know first hand what business owners need and expect from their workers.

When I was growing up in the 1970s, Japanese radios were sold as cheap junk. Then, someone over there got a clue. They looked at the size of the electronics market in America and abroad. They correctly assumed that if they could just embrace the quality aspect of manufacturing, that they may be able to reap a huge financial reward.

The people of Mexicali have apparently studied the Japanese model. They are committed to improving the economic future of their community by creating opportunities for their citizens to work in well-paying jobs in industries that seem poised for future growth.

It will be interesting to see what happens in the year ahead as Fleetwood brings a world class manufacturing facility to a people hungry enough for opportunity that they have built an infrastructure around training people to be ready to work. Just like in Field of Dreams, Mexicali leaders knew that “if we build it (a quality business environment), they (manufacturers) will come.”

Fleetwood is the first to set up shop.  I know other manufacturers are tired of the incessant demands of unions, burdened to the point of inefficiency by ridiculous government regulation, squeezed out of profitability by punishing tax laws, and hampered by a workforce that calls in sick for every little sniffle. Will other manufacturers follow suit?