Motor Homes

SIC 3716

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing self-contained motor homes on purchased chassis. Establishments engaged in manufacturing self-contained motor homes on chassis manufactured in the same establishment are classified in SIC 3711: Motor Vehicles and Passenger Car Bodies. Establishments primarily engaged in manufacturing mobile homes are classified in SIC 2451: Mobile Homes, and those manufacturing travel trailers and pickup campers are classified in SIC 3792: Travel Trailers and Campers. Establishments primarily engaged in van conversion on a custom basis are classified in SIC 7532: Top, Body, and Upholstery Repair Shops and Paint Shops.

Industry Snapshot

After the industry's shipment values fell from $5.3 billion in 1999 to $3.3 billion in 2001, motor home manufacturing rebounded to $5.5 billion in shipments in 2002 and $6.2 billion in 2003. Signs that production was beginning to outpace demand started appearing during the first quarter of 2005, but industry revenue from 87 establishments grew steadily, up to approximately $6.2 billion in 2006. In 2006, 390,500 RVs were shipped, 1.6 percent higher than 2005 for the fifth consecutive year of growth. In 2007 and 2008 however that trend reversed substantially. 2008 saw 208,700 RVs shipped, a decline of 37 percent from the previous year, and 28,300 motorhomes, a 49 percent drop. The industry experienced another significant decline in 2009 due to an economic recession that reduced consumer spending significantly. In all, the industry shipped 165,700 units--152,500 towables and 13,200 motorized--down over 30 percent from 2008.

According to a 2008 study by the University of Michigan's Survey Research Center, approximately 7.9 million U.S. households own a recreational vehicle (RV), a 15 percent increase since 2001 and a 58 percent increase since 1980. Commissioned by the Recreation Vehicle Industry Association (RVIA), the survey showed that baby boomers were the largest and fastest growing owner group. However, while more RVs are owned by 35-to-54 year olds than any other age group, the under 35 age group showed the biggest gain in RV ownership rates since 2001.

Organization and Structure

The recreational vehicle (RV) industry is divided into two groups: towables, which include conventional and fifth-wheel travel trailers, folding camping trailers, and truck campers; and motorized vehicles, which include motor homes and van conversions. However, only motor homes that are built on purchased chassis are covered by this category. The overwhelming majority of motor homes sold in the United States are built on chassis that have been purchased from an outside manufacturer. The two key manufacturers of gasoline-powered chassis for motor homes are General Motors Corp. and Ford Motor Co.

Motor homes are classified as either Class A, B, or C models. Class A vehicles are probably what most people think of when they hear the term "motor home." It is a living unit entirely constructed on a bare, specially designed motor vehicle chassis, and the driver sits within the vehicle itself. Class A models have been the most popular type of motor home.

The five largest manufacturers in the industry held about 75 percent of the class A and C motor home market in the late 2000s. Fleetwood, Winnebago Industries, and Monaco Coach Corp., which are the top three manufacturers, accounted for more than half of the market.

Background and Development

According to one source, the first motor home in the United States was built to take tourists out West for the San Francisco Exposition of 1915. Although its promoters claimed it had all the advantages of an ocean cruiser, with hot running water and electric lights, testimony confirming the comfort of the journey does not appear in any historical record. Wealthy industrialists, notably Henry Ford and Thomas Edison, were among the pioneers of the motor home industry. They built relatively luxurious caravans with amenities like leather swivel chairs and refrigerators. The well-to-do were imitated by the middle class, who bolted boxes to the backs of Model Ts and fastened a bed and dresser inside to create what was then called a "house car." American individualism was soon apparent, and by the late 1920s, one could see house cars that looked like log cabins, miniature mansions, and even airplanes.

Early motor home travelers stayed overnight at farms and ranches, but eventually large campgrounds were built that could hold more than 1,000 vehicles. The sites were often overcrowded and unsanitary, and a far cry from the outdoor life these early RV users sought. Driving the first professionally built motor homes was not much fun either. They were made with heavy materials that overtaxed the chassis and had poor weight distribution. Insulation was poor and the vehicles were not suited to the roads of the time. Thus, until the 1960s, the towable trailer was the more popular form of RV.

In the mid-1950s, some small companies began to build what might be called motorized trailers. While they were a significant improvement, they were still overweight and underpowered. A few years later, however, Winnebago Industries began to introduce its innovative products, which became popular in the late 1960s and early 1970s. The company developed a special wall construction called Thermo-Panel that had the required structural strength and offered good insulation but was light enough to increase gas mileage and engine performance. Moreover, once Winnebago introduced assembly line production, it was able to make its motor homes much less expensively than the competition could. Nevertheless, buying a motor home represented a major financial commitment.

A notable trend in the industry was for larger vehicles with more equipment. A corollary was the increasing popularity of slideouts, which are roll-out room extensions that allow manufacturers to increase the size of floor plans. Although slideouts posed problems for campground and resort operators, consumers wanted them and, by the mid-1990s, these held about 30 percent of the market.

In 1997, a joint promotional campaign was launched by recreational vehicle manufacturers, suppliers, dealers, and campgrounds promoting the lifestyle and experience of owning a recreational vehicle. Those efforts were rewarded in 1998 with the best year the industry had experienced in 20 years. In 1998, shipments of recreational vehicles reached 292,700, an increase of 15 percent from 1997. The growth rate was shared equally by both industry sectors, with motor homes up 15 percent with 63,500 units and towables up 14.9 percent with 229,200 units. Type C mini-motor homes and conventional travel trailers had the largest increases, at 25.1 percent with 98,600 units and 25 percent with 17,000 units, respectively. Type A motor home shipments increased 14.1 percent to 42,900 units. The best total in nearly 25 years was reported by folding camping trailers, at 9.9 percent and 63,300 units. The total for truck campers rose 4.9 percent with 10,800 units, and an all-time record was set for fifth-wheel travel trailers, with a 7 percent increase and 56,500 units shipped. The retail value of these shipments reached $8.4 billion.

In the late 1990s, industry participants were optimistic about the industry's long-term prospects. The essential economic ingredients of an expanding economy, low interest rates, and low unemployment appeared to be in place, and demographic trends were on the industry's side. The prime buyers of motor homes were 50 years of age or older, and this market was expanding with the aging of the U.S. population. At the same time, those between the ages of 30 and 49 entered the RV market in significant numbers. While they tended to buy inexpensive towables, their purchases signaled that they liked the RV lifestyle and perhaps would be willing to trade up to a motor home when they had more leisure time and more money. Some also believed that the growing preference of consumers for "car substitutes" like light trucks and sport utility vehicles would make the prospect of tooling around in a 40-foot Class A motor home less formidable.

Production numbers continued to rise steadily in the mid-2000s. Because the industry's sales trends tend to exaggerate the overall economy (motor homes sell at better-than-average rates when the economy is good and worse-than-average rates when the economy is bad), an anticipated hike in interest rates, high fuel prices, and a slowdown in the economy led to a yearly industry decline beginning in 2006.

In 2007, the 80 establishments engaged in the manufacture of motorhomes earned about $5.78 billion with 17,581 employees who earned just under $727 million in pay. Total revenue for 2008 dropped to $4 billion, with 18,932 employees who earned $729 million in pay. Motorhome sales plummeted 49 percent from 2007 to 2008

Current Conditions

The global recession negatively impacted the industry in 2009, with overall sales declining more than 30 percent. In 2009, the industry shipped 152,500 towable units, compared to 208,700 in 2008, and 13,200 motorized units, compared to 28,300 in 2008. Among specific segments, the industry shipped 101,00 travel trailers, down 21 percent; 36,800 fifth wheels, down 35 percent; and 12,00 folding camping trailers, down 35 percent. Among motorhomes, Class A shipments totaled 5,900 units, down 60 percent; Class B shipments totaled 1,200 units, down 37 percent; and Class C shipped 6,100, down 47 percent.

As a result of the tough economic conditions, RV companies slashed jobs and production capacity in an effort to rein in costs. While some were able to remain afloat, others were forced to shutter their business for good or were bought out. For example, Country Coach LLC, which was founded in 1974, first sought protection in Chapter 11 bankruptcy early in 2009. However, with no financial backing available through 2009, the company was pushed into Chapter 7 bankruptcy in November and forced to liquidate its assets to satisfy creditors.

In addition, Riverside, California-based Fleetwood Enterprises, the largest and among the oldest U.S. motor home manufacturer, also filed for Chapter 11 bankruptcy in 2009. Fleetwood featured such brands as American Eagle, American Heritage, Southwind, and Tioga, and the company was also a leading maker of manufactured housing. The company had experienced a net loss every year since 2001. Its motorhome division 's assets were acquired by American Industrial Partners, a private equity firm. Similarly, Monaco Coach (now Monaco RV) filed for bankruptcy in 2009 and was purchased by Navistar.

As 2009 ended, the worst of the worst appeared to be over as industry insiders watched carefully as demand slowly crept back into the marketplace. By mid-2010, sales were up significantly over the previous year. According to data from Surveys of Consumers at the University of Michigan, RV sales totaled 76,000 units during the second quarter of 2010--the largest quarterly increase in over 25 years. Although sales were expected to level out over the remainder of the year, predictions for 2010 and 2011 were estimated at 239,900 units and 259,600, respectively.

Industry Leaders

Winnebago Industries Inc., headquartered in Forest City, Iowa, celebrated its fiftieth anniversary in the industry in 2008. Because of the company's long-standing position as an industry leader, the brand name "Winnebago" is often used interchangeably with the term "motor home" in the vocabulary of many Americans. In addition to Winnebago, the company produces vehicles under the Itasca and Rialta nameplates. Winnebago reported sales of $604 million in 2008 and $449.5 million in 2009.

Monaco RV of Coburg, Oregon, reported sales of $1.2 billion in 2007 and employed 5,348 workers. Monaco was the leading producer of luxury diesel motorhomes. Monaco filed for bankruptcy protection in 2009 and was purchased by Navistar Interanational. It now operates as a subsidiary of Navistar.

Other industry leaders in the late 2000s and into the early 2010s included publicly operated Thor Industries, headquartered in Jackson Center Ohio, and privately run Forest River Inc., located in Elkhart, Indiana. One interest effect of the many closures and cutbacks during the recession was a proliferation of startups popping up, primarily in Indiana, of former RV executives and employees.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Motor Homes

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US Fed News Service, Including US State News; October 24, 2017; 306 words
...a Form 4 with the Securities and Exchange Commission noting the change in the beneficial interest held by VP And GM Motor Homes Brian Daniel Hazelton, Forest City, Iowa.On Oct. 18 the action involved acquisition of 8241 stock optionss (rights...
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US Fed News Service, Including US State News; October 17, 2017; 308 words
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