RVers who are anxiously awaiting the delivery of their new Winnebago recreational vehicle might be in for a longer wait than they expected.
Winnebago President and CEO Michael Happe told analysts during a conference call last week that his company’s order backlog is far larger than had been previously reported.
Happe said every rig coming down the production line at Winnebago already has a buyer’s name attached (either a dealer or retail customer). He said when his production team receives a backlogged order, they try to schedule a production time. Right now, it could be anywhere from three to 12 months before assemblers start their work.
Winnebago is now reporting a whopping $4 billion in order backlogs, including $1.7 billion in towables.
“We had several products with significant orders that we cannot yet find production capacity for,” Happe said during last week’s call. “So, we took those out of the backlogs that we reported for the fourth quarter because we felt that was the right thing to do from an integrity standpoint.”
Happe blamed inflation for increases in RV prices, saying the cost of materials and components is continuing to go up.
“Never before have we seen suppliers come to us and implement cost changes the next day,” he said. “We are dealing with sometimes weekly price increases in an unexpected nature and then reacting to that.”
“Given the levels of cost input inflation that we have witnessed over the past year, we are thoughtfully working to mitigate these cost increases with our internal cost savings initiatives,” Happe said. “However, it has also been necessary for us to pass price increases that serve to offset the inflationary pressures.”
He said Winnebago RV unit prices have increased from 5% to 20%. He also said high-demand units may also see price increases tied to the market.
Happe also said Winnebago is trying hard to hold the line on unit pricing throughout the sales cycle. There have been many reports from dealers and RV customers of prices going up after the unit was ordered but before it was delivered many months later.
Happe said Winnebago is having trouble “protecting” the price on units, even when buyers have put down a deposit on their order.
“We don’t know what the true cost of that unit might be … if we haven’t even built it yet,” Happe said. “We have offered (dealers) consistent support through the years. That position has evolved currently because of the potential time it would take to deliver a retail unit to that customer and the potential change in input costs,” he said.
“It will depend on the dealer. It will depend on the model. It will depend on the brand. It will depend on the time gap between when that retail deposit is put down and when that unit might be delivered. Those are daily conversations between our teams and our dealers.”
To view a written transcript of the entire Winnebago analyst call, click here.