By Mike Gast
I recently had the pleasure of sitting in on a conference call with about 20 large RV dealers and a few other “movers and shakers” in the RVing industry. Boy, it was an eye-opener.
You’d think that everyone on the call would have been doing celebratory cartwheels over the RV manufacturing shipment numbers for the past four quarters, not to mention the fact that dealers literally can’t keep any of those new RVs on their lots.
But the call was filled with cloudy, dark undertones of doom. While I can’t name names at this point, the primary topics on the call were the severely broken supply chain for RV parts, the resulting inventory problems for RV dealers, and the price increases dealers are already seeing on the very few rigs that are trickling in from the manufacturers.
As you read this, there are dozens (some say as many as 40) huge container ships floating around the ocean just off the U.S. West Coast near the ports of Long Beach and Seattle. They are full of just what American manufacturing needs to get going again. But the ports are understaffed and there aren’t enough truckers to haul it all away. Thus, links in the supply chain remain broken, and the boats continue to aimlessly float.
Most RV dealers are completely sold out due to broken supply chain
Many of the big RV manufacturing plants can only fully operate for 3-4 days a week before they are forced to shut down and wait for more parts hung up in the supply chain. Unlike dealers’ lots, the manufacturers’ plant acreage is overflowing with nearly done RVs. They’re just waiting for that one missing faucet or silicon chip from China.
The really bad news is that it’s probably going to take a year or more to untangle the supply chain and get things back to any semblance of normal. That likely isn’t going to lessen your time on the RV repair waitlist.
All of this comes, of course, at a time when demand for RVs is at an all-time high. Lack of supply added to increases in demand always lead to higher prices. Dealers say they already had price increases from many manufacturers this spring. They have been told to expect more of the same this summer. Some dealers are doing the right thing and calling buyers who put down deposits and offering to return the funds or at least apply it to a purchase next year. Amazingly, many buyers are telling them to “let it ride” until 2022.
Prices of RVs going up
These factors are also driving up the prices of used RVs, which are the new unicorns of the transportation industry. Industry insiders say typically 40% of new RV sales included a trade-in RV. Now, that figure has dropped to about 13% at some dealerships.
Don’t feel too bad for either the manufacturers or the dealers. They all did pretty well in 2020 and the first quarter of 2021. But it has to be frustrating to have to turn away frantic buyers who are willing to purchase anything that would roll off the lot.
This summer, a job in RV sales could be a precarious position … and very, very lonely … all due to the broken supply chain.