RV Dealers & Makers do not Fear Fuel Fallout
Wed Apr 20, 2011
Author: KIMBERLY PIERCEALL
Source: The Press-Enterprise
The RV industry had sputtered into the most recent recession already on fumes, in part because high gasoline prices had would-be campers reconsidering buying a home on wheels that can hold, in some cases, 80 gallons of fuel.
Now with the recession still visible in the industry's rear-view mirror, gas and diesel prices have risen again. Earlier this week, the price for a gallon of regular unleaded gas in the Inland region was $4.14.
Diesel cost $4.52. It's not that far from the record high in June 2008 when a gallon of regular unleaded gas in the two-county region and statewide cost $4.61 on average.
The next month, diesel fuel prices reached a record high -- $5.16 -- in Riverside and San Bernardino counties.
This time, though, the RV dealers and manufacturers that survived the economic downturn aren't fearing a fuel price fallout.
"As crazy as it may sound ... we haven't seen any negative effect yet," said Scott Degnan, vice president of sales and marketing for MVP RV, adding that orders for the Riverside-based company's trailers and Class C motorhomes are growing 30 to 40 percent each month with a one-month backlog.
The company made news last year when it announced it had built an all-electric Class A, similar in size and style to a tour bus, with plans to go into production on it later this calendar year -- long before gas prices started to balloon above $4.
In a survey of 701 RV owners online between March 10 and March 21, the national association that represents manufacturers reported that 53 percent planned to use their RV more than usual during the spring and summer despite rising gas prices.
Granted, 68 percent of those surveyed said they expected fuel prices to affect their travel plans in some way or another, leading the majority of those respondents to say they'd travel closer to home this time.
A little less than half said they'd travel fewer miles, and 37 percent said they would stay longer in a single location to maximize the cost of fuel.
That's what Mike Murphy, vice president of sales and marketing for Giant RV, a retail sale chain, surmises has happened.
There's speculation that the point of no return for would-be RV-ers would be $5 a gallon for gas, he said.
Until then, "it's just wait and see," he said.
One recreational vehicle dealer was concerned, thinking there was no way that gas prices rising above $4 a gallon wouldn't have an effect on sales, but all evidence related to consumer demand has told him he shouldn't be.
Frank DeGelas, owner of Mike Thompson's RV chain of dealerships including a location in Colton, said sales volume in March was the highest he's seen in 3 ½ years.
"I would not have been this bullish until last month," he said. DeGelas said he took a motorhome to San Diego for his own vacation by the beach.
Estimating the fuel cost for the 180-mile round trip between Orange County and San Diego for a vehicle that could get 10 miles per gallon (or usually, less), "it really wasn't that big a part of the whole equation," he said, adding, "In Southern California, how far do you have to go?"
That desire to camp, regardless of the price of fuel, turns someone who wants a motorhome into one who owns a motorhome, said Jeff Dailey, the new general manager of Riverside-based Pacific Coachworks, which makes towable trailers that are hauled, typically by a fuel-powered truck.
"I've never seen gas prices alone really affect the consumer. They still want to camp," he said.
That hasn't stopped the company from looking into ways to make their trailers more fuel-efficient.
Since Pacific Coachworks was bought late last year, the company has been working on a new line of lighter trailers -- 7 ½ feet wide instead of the usual eight - that have laminated walls, floors and ceilings versus wood.
Larry Broyles -- the leader of the now Corona-based Warrior Lifestyles who revived the Weekend Warrior brand of trailers after the prior owners filed for bankruptcy -- is remaining conservative with his production, limited manufacturing to one trailer a week describing his plan as "very slow, very small, very simple."
Even with the unsettling shadow that gas prices might cast on RV sales, he said he can sustain his schedule of production and thinks buyers might be offsetting the high price of gas with a lower-priced recreational vehicle.
Then again, for buyers who have ample disposable income to buy a high-priced vehicle, the price of gas "really doesn't affect them," he said.
Nonetheless, an optional feature on his trailers that used solar energy to power water pumps, lighting and more instead of a fuel generator is now standard, he said.
