While most of the phone calls I have been getting look at the top 50 dealer awards as another ploy of AGI, when I called around to ask other less vocal dealers of their thoughts, many were unconcerned. That said, it seems a good number of dealers are worried that this will be a repeat of the “Marcus Lemonis as Man of the Year” situation we saw in RV Business in 2007. I’ve heard many complain (justified or unjustified) that the magazine has a history of biased coverage and the awards are another opportunity for AGI self-promotion.

Some feel that the dealers who win in 2008 will be a lengthy list of FreedomRoads dealers. When I asked Marcus Lemonis about this, he said that he had asked the judging panel to only consider one FreedomRoads dealership for the award, which is within the guidelines of the published rules. Dealers eligible to win the award were selected by RV manufacturers with reportedly no input from AGI. RV Business then sent qualifying dealers a questionnaire for the panel of independent judges to choose 50 winners from. The panel is composed of Jim Sheldon of Monaco Coach, Bob Parish of (RV Group) GE Capital Solutions, Brad Sargent of Dometic, Carl Pletcher of Thetford and Larry Lebryk of Atwood Mobile products.

Others feel that in the first year, the contest will be fair and unbiased, but will be heavily slanted in subsequent years after the award has been established. Some dealers I spoke with are entirely indifferent and don’t even plan on returning the application.

Another concern of people ringing my phone is that this is merely a sneaky attempt to gather information about FreedomRoads’ dealer competitors. Others feel that this information can be obtained easily from Statistical Surveys in Michigan and that supplying the information to Affinity Group is no big deal. Some dealers have said they will send in the application but will refuse to answer certain questions.

While some dealers view the top 50 dealer awards as a great idea and a very positive thing that will promote higher quality standards, others are equally passionate about how nothing good will come of it. One caller suggested that the award program was a method for AGI to decide which dealerships they would attempt to purchase next. Another caller bluntly told me that he didn’t feel that an award from his biggest competitor, who is trying to put him out of business, had any value. He said he was adamantly boycotting the whole process.

Since there seems to be a great deal of interest surrounding this, I thought it would be nice to toss it out there for everyone to discuss. Good? Bad? Indifferent? What do you think?

It seems our concerns were unfounded because no other manufacturers followed suit. Fleetwood didn’t whole-heartedly close up shop in the U.S., either.

Interestingly enough, a southbound migration is occurring. I just read a story http://www.msnbc.msn.com/id/25175249/ about how consumers are crossing the border to fill up their gas tanks. The story says that in Tijuana diesel is only $2.20, but just a few miles north in San Diego, diesel is $5.04 a gallon. That is a pretty big difference.

Mexican government subsidies are keeping the price down, which raises the question, “Is it cheaper to manufacture raw goods like steel, aluminum and fiberglass down south?” My guess would be, “Yes, for right now.” Will the trend continue?

I am told from various suppliers that the cost of building materials for RVs and aftermarket products has risen substantially with the rising cost of oil. If labor is less expensive in Mexico, and the cost to build and buy raw materials is less expensive in Mexico, and the fuel price of shipping the RV to the dealer is 50 percent cheaper from Mexico, the questions I ponder are, “Are other RV manufacturers taking a harder look at Fleetwood’s decision and potentially considering a move?” and “How much of a margin does this really build into a unit?”

Many believe some of the economic conditions we see today are effects of how the world is changing to a global economy. Will the factors that make Mexican RVs, hitches, furnaces, sinks and other products so attractive continue to impact our industry or is this merely something short-lived that we must weather?

National RV rentals are booming, campgrounds are full and yet RV sales are sluggish. Since the people who own RVs are using them, the key is convincing people to take the plunge and buy an RV. Once they do, we all know they won’t regret it. So how do we convince them? I see time and again how companies are focusing on directly advertising to the consumer. While we have seen unbelievable success with this in the past, it doesn’t seem to be working so well of late. The fact is you can’t out-advertise the media. The people who decide what “news” is and what the “facts” are have the upper hand when it comes to reaching the consumer.

I think our entire industry should make a concentrated grass roots effort to change the type of coverage we are seeing in the national press. Call it a “Sponsor a Reporter Day.” What would be the impact if every dealership in the nation made an effort to send a local reporter (with his/her spouse) out camping? Send them to a nearby campsite with a refrigerator full of food and a full tank of gas. When they return, give them an itemized list of what it cost to get them there. Groceries and necessities $75, travel distance 90 miles round trip (equating to $48 in gas), camp site fee $36. Let them write about the real cost of camping coupled with the awesome time they had. Heck, getting them away from the doom and gloom of a newsroom would probably do loads for their overall disposition, the type of news stories we see about RVing and ultimately our national economy. Target the news “decision maker” is what I say.

When you consider the price to reach the consumer through advertising, the cost of implementing this would be fairly small. Heck, dealers could do this for weeks on end until the entire local newsroom had gone RVing and it would still equate to less than a couple of consumer-targeted ads. The free coverage would undoubtedly be positive and could be priceless. While national advertising campaigns are great (and who can dispute the impact of GO RVing?), let’s take it to a new level and target a whole different demographic.

While an RV dealer may have little control over where consumers decide to ultimately register their vehicles, I suspect dealers recommending this practice to customers could get their sales tax license pulled, causing all sorts of problems for the dealership.

My question for this week’s blog is does your F&I manager discuss vehicle registration with your customers and do they offer advice on where to register? Is this out-of-state-registration practice illegal in your city and state? Do you have a company policy regarding this and if so what is it? I know there are tons of lawyers’ ads in RV consumer magazines soliciting LLC business from potential new RV customers. How big of an issue is this for your dealership?

North Dakota, South Dakota, Minnesota and Washington are among the states examining what legislative changes will need to be made to legally allow the 1/2–gallon pricing. Some states have already told gas stations to display the 1/2–gallon price and charge double until a solution can be found.

For many small gas station owners, the price to upgrade the mechanical dial pumps to a digital counter version is just too expensive — $10,000 to $15,000 each. It seems that despite record prices for gas, the station’s margin is relatively small. An upgrade for the old-style pumps is available but the computer in the pump was never designed to handle prices this high. This causes the pump to wear out rather quickly with the upgrade.

Is gas the beginning of the “double the sticker price” concept? It seems all those years of arithmetic in school will be needed after all as we calculate exactly what it costs to fill our tanks.

Freshly returning from Winnebago’s dealer days in Las Vegas, I heard a number of ideas and product innovations leading me to believe the company will continue to hold its own in the motorized category with its 2009 Itasca and Winnebago brands. This being recently-appointed Bob Olson’s first dealer days as Winnebago’s Chairman of the Board and CEO, it appears that Bruce Hertzke has left the company on very solid ground. The company has its facilities paid for, has no debt and reportedly has plenty of money in the bank for innovation in coming years.

Winnebago announced that it has decided to “hold the line” on pricing for diesel models on the 2009 lineup. This means dealers will offer the company’s brand new models (with upgraded features) for last year’s model prices — a strong selling point in what will surely be a competitive market this year.

When it comes to product upgrades, some models will feature Winnebago’s all-new global positioning system (GPS) called the GPgo. The unit includes a removable Alpine GPS unit for use outside the RV with an in-unit docking station for the driver while traveling. The touch screen can be viewed and operated by both drivers and passengers heading down the road. The GPgo has been added to the Winnebago Journey, Tour and Vectra models and the Itasca Suncruiser, Latitude and Meridian.

Other Winnebago innovations include a new body–conforming mattress, an expanded offering of the company’s RestEasy theater seating module and the Dream Dinette that has been popular of late with various manufacturers.

Foretravel President Lyle Reed has his own ideas for weathering the storm. In a letter recently posted on the company’s website, he announced a new “Freedom to Drive” program for any new 2009 Nimbus or Phenix units ordered or purchased from May 15 to June 30. The program reimburses consumers for some fuel costs during the warranty period as well as pays for normally scheduled maintenance and service on coaches. To sweeten the offer, the company has lengthened the warranty periods for some of its models.

Offering creative pricing, new gadgets and free gas are only a few of the ways companies are pushing through this year’s challenges. Fleetwood Enterprises recently sold both its corporate headquarters and folding camper division to raise $100 million for an up-coming bond redemption. While those moves may appear to be signs of desperation, in 2007 the company was the market leader for Class A motorhomes and has a number of options available to push through the slower season.

Coachmen Industries is taking an entirely different approach. The company is borrowing against the value of its own employees’ life insurance policies. Reportedly, Coachmen tapped roughly 50 percent of the value of those policies according to filings with the Securities and Exchange Commission.

Those are merely a few of the different ways manufacturers are addressing present economic conditions. I’d love to hear your thought on these and any other ways companies are changing the way they do business to do what it takes in 2008. As Winnebago’s Olson said at the dealer meeting this year, it is important for dealers to align themselves with strong business partners to ensure they are not left holding the bag when a manufacturer goes belly up.

Thanks for participating in this week’s blog.

I’ve also been told that loan delinquencies on RVs are up, which has kept interest rates high despite the recent rate cuts by the Fed. When you add in that credit lending has tightened (check a recent MSN story on it here) significantly, selling an RV has gotten a little tougher as of late.

How do you think GE’s departure will impact your business and our industry on a micro and macro level? Will other companies quickly pick up the slack with no real impact, or will there be a gaping hole left by the third largest lending institution exiting the industry?

This March was a little different because the units trickled in to dealers instead of having a mass March product infusion. The recent data from RVIA shows that March new unit RV shipments in every category were down. Motorhomes topped the list with a 35 percent decline from last year and towables were down by almost 10 percent. Check out the numbers here.

Some claim that towable RV sales are directly linked to truck and SUV sales. I think they are related but so many factors play in to it. It is difficult to compare RV new unit shipments to truck new unit shipments because of distribution differences within the two industries but we can look at new unit sales for tow vehicles.

New truck and SUV sales universally dropped by double digits in March. General Motors’ March truck and SUV sales were down 22 percent. Ford reports March truck and SUV sales dropped 16 percent. Toyota Motor Corp. says March was down 14 percent from same month sales in 2007. Nissan was down 20 percent and Honda was 12 percent.

According to the American Bankers Association, consumer’s auto loan payments made to dealerships (indirect auto loans) are being made late at the highest rate on record—3.13 percent. Late auto loan payments to banks (direct auto loans) are at a 2-1/2-year delinquency high of 1.9 percent. In essence more people are having a tougher time making their truck payments. On the bright side, this means that 97 percent of consumers are doing just fine paying their truck loans. Hopefully, they will have extra cash to add a new RV as well.

The drop in new unit RV shipments could mean a variety of different things. It could mean dealers already have plenty of RVs for the busy summer season and their days inventory has increased, so they have no need for new units. It could mean that dealers are anticipating selling fewer units this year and see no reason to incur interest charges on units that they believe will just sit for a lengthy period of time. It could also mean that manufacturers are delivering units a little later in the year and we will see a surge of shipments in April or May.

Interpreting the data can be done any number of ways. It would be interesting to see how dealers from different parts of the country perceive the data. It would also be interesting to read dealers’ perceptions on how tow vehicle sales will impact this year’s RV sales. Do decreased truck and SUV sales foreshadow tough times for the travel trailers and fifth wheels?

Over the years additional studies have been conducted to make sure the report was not an anomaly, and the results were very similar. To address the issue, five areas were identified that consumers complain the most about. Task forces were assembled to figure out the best ways to address the five major complaints of consumers. The reality is all five areas center around a single problem – RVs breaking down and not getting fixed quickly.

How upset would you be if you bought a car and within the first week of owning it, something broke on it? When you returned the vehicle to have the problem fixed, they told you it could be anywhere from a several weeks to three months to fix the problem. Would you buy from that dealership again? Would you buy that brand again? Heck, if you didn’t really need the vehicle, would you even bother owning one? The contributing factors to this problem are so diverse that it has taken several years and countless hours donated by a host of really bright volunteers just to figure out a plan to fix why RVs break so often and why they can’t be fixed in a timely manner.

All of these problems center around one thing — money. The push in the industry has been to bring down the cost of RVs so they are affordable to a larger number of consumers. More consumers able to buy RVs equates to increased sales. Everybody makes more money. The problem is that the infrastructure to support the increased sales was never developed and lowering the per-unit cost came at the expense of quality. The pool of consumers is so great that 25 percent attrition was acceptable. It is a classic case of volume over margin.

This race to the bottom line has affected the entire RV distribution chain from supplier, to manufacturer, to dealer. Competition to lower price has impacted everyone in the industry, forcing them to cut costs and consequently, quality, just to stay in business. There are a number of manufacturers and dealers whose primary business niche centers around producing and selling the lowest-priced RVs. They have mastered this business model and have no incentive to change because they are making money. If 25 percent of their customers are unhappy, that’s acceptable, because unhappy customers’ checks cash just as easily as happy customers’ checks do once a contract has been signed.

The only way this will change is if there is a public relations fall out and the money disappears. This is on the horizon because consumer demographics are changing. Generation Y tolerated the headaches of RVs breaking, but subsequent generations are not as tolerant. When this happens (and it will soon), good businesses will suffer alongside the low-cost, volume RV manufacturers, suppliers and dealers.

This is why the task force’s work is so vital to the industry. As an industry, we must change the way we approach everything when it comes to making and selling RVs. If we have the foresight to implement the task force’s recommendations, we can avoid the looming PR nightmare and continue to grow.

There will be resistance by some in the industry because they have a good thing going with inexpensive, poor-quality products and poor customer service, but we cannot let them define our industry’s future.

At RVIA’s annual meeting, a presentation was done on how each candidate, if elected as president, might impact the RV industry. Would we be better off with a republican or democrat? Would Hillary be nicer to us than Obama?

What about McCain? Is he an outdoorsy sort of guy?

Now I realize that who is put in office may impact a whole host of things that could directly or indirectly impact our industry in different ways. For instance, if a democrat is elected, it will most likely mean an increase in ma and pa’s taxes, not to mention business taxes. On the other side of the coin, if a democrat is elected they say they will do something about the price of oil and promise to end the war. If a republican is elected they promise to do something about immigration reform and will bring economic stability to the U.S. and overall stability to the Iraqi nation. Nearly every issue you can imagine that is important to any segment of our population will be impacted in some way, shape or form. The question is “how?” I sure don’t know.

My experience with government is that it is so slow moving that progress on any front, on any issue, is nearly impossible. Even when a party dominates both the executive and legislative branches of government, there is always the filibuster.

It can be really frustrating when it appears that politicians spend most of their time drawing things out to prevent anything from being accomplished, rather than actually providing solutions to the nation’s problems. A really great example is the mortgage mess that has been going on for more than a year. Congress has had more than 12 months to offer a solution. This issue has impacted the RV industry, and on a greater scale our economy so drastically, it’s truly amazing nothing has been done yet. I suspect the real reason is because nothing can be done with so many people involved. They say the quickest route to getting absolutely nothing accomplished is to form a committee. Our government is one big committee.

My question to bloggers this week is: who will be the best presidential candidate for the RV industry, and why do you think that? I hate to say this, but as with all blogs, remember to be nice with each other as we discuss this, or I may delete your comments.