If you had doubts about the stories regarding RV dealer lot inventory shortages and the demands on RV manufacturers, Thor Industries CEO Bob Martin wants you to know that yes, everything you’ve heard is true. Thor, the largest manufacturer of recreational vehicles in the world, is all sold out until next year.
Martin recently appeared on CNBC’s popular “Mad Money” television show to talk about the first quarter of 2021 being the best quarter in Thor’s history. He said the explosion of interest in RVing and the subsequent boom in sales has left Thor “pretty much sold out for the next year.”
In fact, Thor is reporting an “order backlog” worth more than $14 billion.
“You look at our dealers’ inventory, which is virtually none. . . . So, we are . . . not able to build inventory at our dealers’ lots.”
Thor Industries owns the following brands outright: Airstream, Crossroads, Cruiser RV, Luxury Suites, Dutchmen, Entegra Coach, Heartland, Highland Ridge RV, Jayco, Keystone RV Company, KZ Recreational Vehicles, Redwood Recreational Vehicles, Starcraft, Thor Motor Coach, Tiffin Motorhomes, Vanleigh, and Ventura RV. That long list includes a plethora of different models. If you don’t own a Forest River or Winnebago, it’s likely you have a Thor.
Thor dealers’ inventory virtually none
“You look at our dealers’ inventory, which is virtually none, and a lot of what we had coming in were retails (units already) sold,” Martin told the Mad Money audience. “Customers have already bought them, and they put them on order. We have backlogs that are full of retail orders, so those will hit the dealers’ lots and then leave. So, we are still not able to build inventory at our dealers’ lots.”
The impact of millions of newbies to the RVing lifestyle, coupled with ongoing kinks in the RV manufacturing supply chain, means it may take a while for supplies at RV dealerships to return to anything resembling normal.
“Right now, we see this as a long-term trend, and if we get people in at an entry-level price and entry-level product, they grow throughout their lifetime,” Martin said. “People trade every three to five years, but right now we are seeing it a little bit quicker, and we see this for a long runway.”
Winnebago Industries, another big player in the RV manufacturing field, reported record earnings of $839.9 million during its second fiscal quarter, which ended Feb. 27, 2021. That’s an increase of 34% over last year. Winnebago’s second-quarter report also stated that Winnebago has a backlog of nearly 40,000 towable RVs ordered but yet to be built. That’s an increase of 425% from the previous year. The report went on to say that Winnebago dealers were experiencing a “sizable reductions to their inventory” due to “heightened levels of consumer retail demand.”
Winnebago’s third-fiscal-quarter results are expected to be released sometime this month.
Forest River Inc., the other big player in RV manufacturing, hasn’t released current details of its manufacturing backlog. Yet it’s likely Forest River is seeing a similar backlog of RV orders and that some level of backlog does exist that will impact dealer inventories.
As we reported in RVtravel.com in May, leading RV dealers in the U.S. are already reporting severe inventory problems, along with troubles acquiring RV replacement parts due to supply chain issues. Many say they’ve seen the dealer cost of new RVs rise substantially due to the lack of raw materials for manufacturing and those costs, of course, will be passed along to the consumer.
Here’s the entire CNBC “Mad Money” segment featuring Thor’s Bob Martin.
So, Mr. & Mrs. Consumer, what do you think about the “new normal” in RV manufacturing? We’d like to know. Please share your comments below.