September '20

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22 • RV PRO • September 2020 rv-pro.com anything else until the end of the season. I think they appreciate our honesty and are being very understanding. "I have seen interest rates rise a little and some credit tiers concern banks more now. If one says 'no', we just go to another. The number of customers paying cash is consistent with what it's always been. "We are forecasting 10 percent more business for 2020 than we had originally expected. We are a little optimistic, but we are also preparing for the downside by cleaning up any aging inventory, building up cash (we are carrying a little larger nest egg than we usually would), and tracking traffic a little more closely so we are ready to react quickly to a downtick. Our management team is also communicating more than usual." Jeff Zimmerman, owner Country Roads RV Center Lexington, N.C. "The market is very strong in our area. We are seeing a lot of first-time buyers purchasing 22- to 28-foot units that fit their cur- rent vehicles. Fifth wheel sales are up some; with everything selling well, but not nearly as much as travel trailers or overall demand. "We can get some inventory, but not nearly as much as we need, which has caused re-order demand for units from factories that were already overwhelmed. "We have not had any issues delivering units, but the good sway control systems are slow coming in and we have had prob- lems getting replacement parts as well, especially from Dometic. "Credit has tightened drastically. A person with credit challenges is much more difficult to get approved today and many are not being approved. Some customers with reasonable credit scores are seeing higher interest rates and almost all lenders are requiring 10 percent down. As a result, some customers are getting their own financing, but there has been no increase in the number of buyers purchasing with cash. "The way I see 2020, two options seem most likely: "Option 1: Things continue as they are with production back- logs and consumer demand slows 10 to 20 percent as many first- time buyers have already made their purchase. Option 2: plants are shut down again due to a second COVID outbreak and the production backlog goes from bad to worse. This option concerns me most for business planning, especially as there is nothing anyone can do to plan for or to weather that scenario." Christy Eagan, owner and president Wisconsin RV World Madison, Wis. "Our traffic has been great, with about 75 percent first-time buyers, possibly due to people having been holed up in their homes. We are hearing that people want to travel but they don't want to fly or stay in hotels. People can keep their RVs germ-free and cook their own healthy meals. "We carry Keystone Residence park trailer, Sprinter and Spring- dale, Winnebago Minnie Drop, Micro Minnie and Micro Minnie Fifth Wheel, Minnie, Minnie Plus and Minnie Plus fifth wheel, Cruiser RV Radiance and Work and Play toy haulers. I'm getting inventory, but it's what I ordered in March. Everything I ordered at the end of May and beginning of June won't get here until the end of August or September. I've heard of dealers out west who have run out of inventory and everyone in my area is low. There might be one or two with over 100 units, but there should be at least five. "Since people have been able to leave home, we can't keep used units in stock. Up until a week ago, I had two: a fifth wheel and a Class A. Then, in one day, I took two trade-ins and two units on consignment. "Prior to lock down, RV parts were difficult to get because of reduced staffing. Now that things are opening back up, the need for air conditioners, awnings, toilet paper, surge protectors and hitches are high, but there's nothing out there to order. We work with three distributors who have tons of out-of-stock products listed, but if they have something, it's in a different warehouse. "Banks have not been as liberal as they were last year. It's almost like they do not want to lend. People with excellent credit scores (over 800) are being declined and if they do receive an approval, they have to provide their two most recent tax returns, up to 12 months of bank statements and a payroll check stub less than 14 days old. And this is for customers with A credit! "There are more cash customers, but the ratio of cash versus finance seems pretty close to what it was before. Increased interest rates have not been a problem as much as lenders shortening loan terms, making it hard for customers to make ridiculously large monthly payments. "Although we've largely lost February, March and April; May, June and July have made up for that. We have also cut some of our large in-house shows and sales to promote social distancing, which saved us a lot in advertising dollars. We've used that savings on less expensive things such as our website, email blasts, etc. "Although the pandemic is rearing its head again, doctors are still saying it's better to be outside than inside, which promotes RVs. If you can safely go camping, hike, bike swim, and do a plethora of outdoor activities with your family, why wouldn't you? "RVing is cheaper than flying somewhere, renting a hotel and a car, and eating out three meals a day. The RV industry has been spotlighted and there's a whole new customer base waiting around the corner. No, I take that back, they're waiting in line outside the dealership."

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