Miller's RV in Baton Rouge, La., broke all sorts of sales records in 1997. And so far this year, the dealer has watched unit sales surge another 20 percent and profit margins widen.
Owner Doug Miller, who carries Winnebago, Coachmen, Fleetwood and Beaver motor homes, said the strong market also is generating better returns in his service, parts and rental departments. In more than 12 years of selling motor homes, he has never seen better business.
'The RV industry is a very good place to be right now,' Miller said.
Wholesale deliveries of motor homes and towable RVs in 1998 are off to their best start in two decades, according to the Recreation Vehicle Industry Association of Reston, Va.
The motor home segment is on a pace to hit a 10-year high in factory shipments. Through the first four months of this year, total motor home wholesale deliveries are up 13.2 percent. The only sour note is a shortage of automatic transmissions that is causing order backlogs for some vehicles.
Deliveries of towables - including trailers, fifth wheels and folding camping trailers - were up 13.8 percent in the first four months of this year. And that may be good news for dealers of cars and light trucks. Nearly 18 percent of RV owners said they bought a tow vehicle specifically for recreational purposes, according to a recent survey from the RVIA.
The RV industry's weak spot continues to be conversion vans, which are down 30.7 percent in the January-April period. Except for the small van camper segment, conversion vehicles are not used primarily for camping.
REASONS FOR BOOM
Motor home dealers and manufacturers credit the growing demand for RVs to a strong economy, stable interest rates, low fuel prices, high consumer confidence and a stock market that has generated a lot of new wealth among investors.
The industry is also in the second year of a three-year, $15 million 'GO RVing' advertising campaign that touts the benefits of RVs. The ad program, supported by manufacturers, suppliers, dealers and campground operators, targets potential RV buyers ages 30 to 49.
Miller said he is seeing more baby boomers on his RV lot. 'That has become a pretty good segment of our business,' he said.
Changing demographics 'absolutely' play a part in the strong demand for motor homes and other RVs, said Michael Terlep, president of the Coachmen Recreational Vehicle Co. in Middlebury, Ind.
More than 45 percent of current RV owners are ages 35 to 54, according to the RVIA. And, Terlep points out, every day for the next 15 years some 12,000 people will reach age 50.
But boomers also have high expectations for service and product quality. Coachmen has worked to raise its dealers' performance and come up with product features that will appeal to boomers. The introduction of slide-outs, or expandable rooms, also has greatly enhanced the living area and appeal of motor homes and towable RVs, Terlep said.
'Not only has the product improved, but there is a very, very firm commitment to improved customer satisfaction,' he said.
Coachmen is experiencing strong demand for both Class A motor homes, which are based on a heavy truck chassis, and Class C mini motor homes, which are built on a van chassis. Through the first three months of this year, Coachmen had the top-selling Class C model.
At Winnebago Industries Inc. of Forest City, Iowa, deliveries of Class A and Class C motor homes totaled 2,009 units in the fiscal quarter ended Feb. 28, up 10 percent compared with the year-earlier period. Through the six months ended Feb. 28, total revenues for the motor home builder are up more than 11 percent. And the company's order backlog is up 78 percent compared with the number of orders on hand at the same time last year.
But Winnebago sees the current motor home demand as something rooted in its traditional RV buying customer base, said Jim Jaskoviak, vice president of sales and marketing. First-time buyers, boomers or not, tend to buy lower-priced towables.
Still, an RV owner who has a good experience with a fold-up camping trailer has the potential to 'migrate' up the product line to an eventual motor home purchase, Jaskoviak said. The entry of large numbers of boomers into the RV market is only now beginning, he said.
Winnebago's market research finds that Winnebago buyers are often on their second or third motor home. These customers, often well-to-do retirees, demand more features and more storage space for long stays in the motor home.
Thus, the RV industry is fitting its motor homes with the latest high-tech features. Among the options: satellite antennas, computer ports, surround stereo, global positioning systems and closed circuit TV systems that let drivers see behind the vehicle when they are backing up.
More features and roomier interiors demand a sturdier chassis. Jaskoviak said the introduction of new, beefier motor home chassis by Ford Motor Co. and General Motors in recent months has helped the RV industry meet customer demands for more comfortable vehicles.
But strong demand for motor homes has put a serious crimp in the RV supply base. Coachmen and Winnebago cite a bottleneck caused by a shortage of heavy-duty automatic transmissions supplied by the Allison Transmission division of General Motors.
Two of the four Winnebago product lines that feature diesel engines are 'starving' for Allison transmissions, Jaskoviak said.
Coachmen now has a backlog of more than 100 unfilled orders for its newly introduced Class A Sportscoach model caused by a shortage of transmissions, Terlep said. It retails for more than $140,000.
'VERY, VERY GOOD'
Allison acknowledged the supply problems and said it was working to increase volume. Last month, the division also announced that it would invest $100 million to increase production capacity. Since 1995, Allison has announced some $400 million in investment for new products, plant modernization and expanded capacity.
At Wheeler's Las Vegas RV, salespeople appear to be coping just fine with the transmission situation.
In the last weekend in May, the Las Vegas dealer delivered 20 motor homes, owner Andy Wheeler said. Total sales are on track to reach $48 million in 1998, up from $37 million last year.
Wheeler has a landscaped, 20-acre property and a facility with 40 service bays. The motor home retail business is becoming more sophisticated, more like the light-vehicle business, and has very good growth prospects.
Said Wheeler: 'Business is very, very good for us. And it has so much farther to go.'