Have We Hit Rock Bottom Yet
The numbers for shipments to dealers for the month of November are finally in. It grieves me to report a measly 6,000 RVs were shipped to the nationwide network of dealers in November. That represents a 71.4 percent decline for towable units and a 75.8 percent decline for motorized units when compared with November of 2007. This probably explains the look of desperation I saw in many of the RV manufacturer’s faces in Louisville this year.
Cumulatively, through November, total shipments are down 30.1 percent from 2008. When I compare the two graphs from 2007 and 2008, the trends pace very similar with a couple big hits in March and October. If the annual pacing trend continues, the good news is we should begin to see things on the rise now that January is upon us and the dealer shows begin. The big question is whether dealers are able and willing to stock up at the beginning of the year for their show season.
Some dealers are struggling to obtain flooring and cash flow is at an all-time low. Dealers may not be able to order from manufacturers in early 2009. Dealers who do have the cash flow to order may not have the confidence to part with what is essentially their safety net.
In other recent news, The Conference Board Consumer Confidence Index showed that consumer confidence hit an all-time low in December. On a whim, I checked to see how the RV shipments graph compared to the graph on consumer confidence. Check out the consumer confidence press release and graph here.
I wanted to see if there was any correlation between consumer confidence and RV shipments. To truly compare the two, you would have to stagger back the consumer confidence data a couple months to allow enough time for any uptick in consumer confidence to translate into dealers restocking units with replacement orders.
Interestingly enough, when examining the two graphs, I didn’t really see any obvious correlation. With all the factors that impact these two, it probably was a little optimistic to think there might have been a pattern there. Even so, I still don’t believe that consumer confidence isn’t directly related to how our industry is doing right now. But maybe this does tell us that available consumer financing is the single most important factor hurting us. What do you think? Is that bigger than consumer confidence?
Lynn Franco, director of The Conference Board Consumer Research Center said, “The further erosion of the Consumer Confidence Index™ reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008. The Present Situation Index is now close to levels last seen in the months following the 1990-91 recession, but is not as low as levels reached during the 1981-82 recession. Declines in the Expectations Index appear to be moderating, but this index continues to hover at historical lows. Both sub-indexes bear careful watching over the next several months to see if they are starting to show signs of approaching a bottom. In the meantime, however, the overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half.”
So the questions remain, will we see an uptick in RV sales in 1st quarter of 2009 like we’ve seen in previous years? Once Obama takes office will consumer confidence rise and people begin spending money again? Have we hit the bottom?
January 6th, 2009 at 3:58 am
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January 5th, 2009 at 5:09 pm
LeAnn: Keep that idea of yours in mind, if it is done the right way, your figures are pretty much on the ball. seeing as how the real figure is over $300 Billion.
January 5th, 2009 at 4:59 pm
Again to Mark, The figure of $85 Billion isn’t the figure at all, today we are talking better then $300 billion, now do the math over. but don’t use the figure of 200,000,000. that is unrealistic figureing. I think you can probably knock that figure by 50 million.
January 5th, 2009 at 4:50 pm
In response to Marks remarks to Dick and LeAnn. Mark the plan isn’t to give this money to everyone in this country who is over the age of 18, it is to be given to the working class of people who are home owners,or renters who are supporting families, paying taxes. we have a lot of people in this country who are 18 and older who don’t have the responsibility of those who are paying thru the nose to keep there head above water. this is suppose to be a free country, where everyone is created equal. but lets be REAL. we can’t treat this bailout to every soul 18 and over, we the people have got to be fair about this, seeing as how our Goverment Reps in washington aren’t trying to help the average family, they think that saving the auto industry is the most important thing to do, well its not, and today the average family man worker doesn’t think so either. your figures are wrong. washington can’t be in charge of who gets this money to help out the family man, it has to be the local goverment working with washington. only the local governing bodies know who the tax payers are in their areas. sure it isn’t going to be easy, but it will be a lot more fair then what is going on at the present time.
January 5th, 2009 at 3:29 pm
Regarding the calculations that LeAnne mentioned I would like to correct the amount to 4250.00 per person and not 425 000. Will this $4250 really make a significant difference to the average over leveraged American.
January 5th, 2009 at 3:23 pm
I’m so sick of this stupid e-mail going around.
Do the math Dick and LeAnn….
$85,000,000,000 divided by 200,000,000 people equals $425 per person, NOT $425,000!!!
That breaks down to $297.50 to the tax payer and $127.50 to Uncle Sam!!
It does kind of make you appreciate the total amount sent out by Uncle Sam in the last round, though.
Nope, with Textron leaving us high and dry, manufacturers causing dealers to fail; dealers causing manufacturers to fail and internet whores causing the traditional roots of the industry to fail (because they can cut deals with manufacturers to buy product cheaper and sell at retail for less than MY COST), we’re a long way from the bottom.
Since the boat guys aren’t faring any better, maybe we can all just hop aboard their “sinking ship” and party on the way down, since we can’t get the buyer of that ship financed anyway!!
January 5th, 2009 at 3:00 pm
I’m in complete agreement with Dick May. Here’s an alternative econmonic plan I had forwarded to me back in September. Now if we could only get the politicians to agree with it. Here it is:
Tongue in cheek, but if you actually think about it…
I’m against the $85 BILLION bailout of AIG. Instead, I’m in favor of giving $85,000,000,000 to America in a ‘We Deserve It’ dividend. To make the math simple, let’s assume there are 200,000,000 bona fide U.S. citizens, aged
18+.
Our population is about 301 million counting every man, woman and child. So,
200,000,000 might be a fair stab at adults 18 and up. Now, divide 200 million, 18+ adults into $85 billion - that equals $425,000.00 each! Yes, my plan is to give that $425,000 to every adult as a ‘We Deserve It’ dividend.
Of course, it would NOT be tax free. So, let’s assume a tax rate of 30%. Everyone would pay $127,500.00 in taxes. That sends $25.5 billion right back to Uncle Sam! It also means that every adult 18+ has $297,500.00 in their pocket. A husband and wife would have $595,000.00!
What would you do with $29 7,500.00 to $595,000.00?
* Pay off your mortgage - housing crisis solved
* Repay college loans - what a great boost to new grads
* Put away money for college - it’ll really be there
* Save in a bank - create money to loan to entrepreneurs
* Buy a new car - create jobs
* Invest in the market - capital drives growth
* Pay for your parent’s medical insurance - health care improves
* Enable Deadbeat Dads to come clean - or else
Remember this is for every adult U.S. citizen, 18 and older (including the folks who lost their jobs at Lehmann Brothers and every other company that is cutting back) and of course, for those serving in our Armed Forces.
If we’re going to re-distribute wealth let’s really do it! Instead of trickling out a puny $1,000.00 economic incentive.
If we’re going to do an $85 billion bailout, let’s bail out every adult U.S. citizen!!
As for AIG - liquidate it.
* Sell off its parts.
* Let American General go back to being American General.
* Sell off the real estate.
* Let the private sector bargain hunters cut it up and clean it up.
We deserve the money and AIG doesn’t. Sure it’s a crazy idea, but can you imagine the coast-to-coast block party?!
How do you spell Economic Boom? W-e D-e-S-e-R-v-e I-t d-I-v-I-d-e- n-d! I trust my fellow adult Americans to know how to use the $85 Billion ‘We Deserve It’ dividend more than I do the geniuses at AIG or in Washington, D.C. .
And remember, This plan only really costs $59.5 billion because $25.5 billion is returned instantly in taxes to Uncle Sam.
January 5th, 2009 at 12:20 pm
This bail-out to the auto manufactures isn’t going to solve a thing in this country, sure it might keep there doors open for a few more months, but in the end, one or two of these manufactures will fail. and the poor working class will be the ones who will get the shaft. this bailout is WELFARE for the RICH, they still have no plan worked out how they are going to stay in business, and they sure don’t know at this time how they will repay the billions they want, to get them over the so-called slump they have gotten themselves into. Our Goverment officials are meeting to help the wrong group of citizens, they need to give this money to the working class. so they can pay off their mortgages,buy new vehicles, if this was done this country wouldn’t be going thru a crisis. if the goverment would give this bailout money to the tax payers, the treasury dept would be financially sound. before they send out this money to the tax payers they will tax this money first, the goverment would be getting back 25 percent of this bailout money. and it wouldn’t be costing this country over $300 billion, we have already made a mistake with AIG. they won’t account for the $85 billion they have already received. wake up people, why don’t we give our local Reps a few ideas. at least it wont be costly ideas like they are making at the present time.
January 4th, 2009 at 12:46 pm
Ya’ll this thing’s not hit bottom yet!!! In my own opinion we’re just watching the dominoes start to fall. The Christmas season shopping was really one of the only things, other than the “raiders” buying up companies and banks with our ‘bail out’ money, that kept December going. A large majority of the population has no reason to go out and buy anything because that’s what the “main-stream media” is pushing by not telling the other side of the story. And that story is, “if you have good credit (720 up) you can get a mortgage, RV loan and whatever money you might need. If you just have a job you can get a new car! Yes the car companies DO have money for new cars. Not being part of the 80% of ‘Sheeple’ in this country I’m looking at the bright side, low fuel costs, low intrest rates (our biz LOC has dropped to 6.5%)and lots of oportunities to capitalize on. I’m not ashamed to say that it is also a great time to clear out the “dead wood” and replace it with some horses that will pull the cart. I can’t change what’s happening so me and my posse’ are exploring new and untried ways of doing things in this nitch market of ours. “Danm the Torpedoes! Full Steam Ahead! or left or even Right, ooooh!, whatever it takes to get us there”
January 2nd, 2009 at 7:07 pm
The problem is more complex than just financing. It is biggest the factor for young buyers. Another factor is the losses suffered in retirement portfolios, for the older buyers. Consumer confidence is a factor for people who could get or do have the money to buy. The last factor will come in after the retailers give us the numbers on their Christmas sales.JC Penney’s Kolhs Sears and the others.