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.
##RVT1023b
A great reason to not buying any large expensive purchases, quit feeding the monsters. Everything and I mean everything is way overpriced and this is definitely not the time to put yourself into major debt, which I believe, will extend long after you are dead. Our economy cannot sustain what is happening right now and there is coming an “Armageddon” of a crash just like the last housing crash because of shady loans giving people who really couldn’t afford that big new house, a loan to buy that house they couldn’t afford because they believe it’s their right. I know what happened as a result of that…do you. Everybody wants wants wants now and a big crash is coming with a whole lot of people upside down on worthless loans. Pretty soon you won’t have to worry about campground crowding because our dollar will be worthless and no one will be able to travel.
Oh and this ceo decided to report honest numbers because integrity lol ok.
If I was waiting, I would cancel my order. Based on some financial data I am checking on, the big crash is coming, and it is going to be 1000 times worse than in 08/09. You will be lucky to eat and have a warm place to sleep. Stock market will lose possibly 15,000 points, dollar will be crushed, so be warned. Pay off debts now, and dont take on any new ones. Trying to sell my RV now, wont be able to afford diesel to use it. Stagflation is being reported by almost all the honest economic people on TV. Atlanta FED report on GDP went from 6.1% in July to 0.5% currently, the economy is slowing quickly, but prices aint going down. Be prepared.
Yes, and since this administration wants to snoop on how much money you have in your bank account, I’d withdraw not only my stocks but only leave $599 in my bank account. You know they will be licking their chops on how much more they can confiscate from us citizens.
Of course there will be people calling this just a conspiracy theory right up until…
That’s why the deposits keep going up- and the amount you advanced the dealer when you signed the sales contract can be increased along the way. You’ll definitely think hard before you cancel the order- all or most of that deposit could disappear.
I’m trying to figure out the materials price increase, I would think the manufacturers would have contracts in place specifying the quality and price.
Also when a price is agreed upon and deposit is placed, then that is the price the buyer should be paying. Increasing the price after the deposit is bad for any future business for that dealership and manufacturer.
James, I don’t think you’ll be doing business with many people if you’re only going to pay a fixed price for anything. Also, this business isn’t your grandfather’s rv dealership…these things are moving targets and the margins on new rv’s was never very great anyway.
Sorry to hear this. Our Winnebago has been by far the best rig we have ever owned (and we have had several over the years). It also has maintained its value and needed fewer repairs. When we purchased it (used) the one thing I did was check the recall list to see what repairs should have been completed. Guess what? No recalls on our model! That is something you don’t see much any more. I can’t speak to the current quality, but based on our experience, it may be worth the wait.