Sunday, May 04, 2008

Downturn drives RV makers into a ditch

Rising gasoline prices, falling home values and tightening consumer credit are driving U.S. recreational vehicle sales off the road as the business enters the normally busy spring and summer selling season.

The industry is scrambling to adjust by laying off workers, selling real-estate assets to raise money and bringing back cheaper, more fuel-efficient vehicles whose popularity peaked during the last oil crisis in the 1970s.

Analysts are skeptical the turnaround will be quick. They say it's going to take time for consumer confidence to rebound and predict 2008 will wind up being another down year for retail sales -- the fourth in a row.

The news is mostly grim. On Tuesday, Fleetwood Enterprises Inc., which makes bus-sized motorhomes and towable camping trailers, said it had sold its Riverside, California, headquarters and will defer dividend payments on some convertible debt to boost finances.

The news from Fleetwood, the latest in a series of worrisome announcements from major industry players, came a day after news that RV industry wholesale shipments fell 17 percent in March, pulled down by a 27 percent decline in motorhomes and a 36 percent drop in shipments of the very biggest vehicles.

Sales have been hammered as the U.S. economic downturn eroded consumer confidence. Year to date, motorhome shipments are down 24 percent and towables are down 14 percent.
Full Story...
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