Thor says demand for larger RVs drove acquisition of Wakarusa campus
Posted: 06/07/2013 at 12:40 pm
By: Justin Leighty
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The exterior of the main building on the Navistar RV campus in Wakarusa, Ind., is pictured in this Tuesday, June 4, 2013, photo. (Truth Photo By Justin Leighty)
In Thor’s quarterly report filed Thursday, June 7, with the U.S. Securities and Exchange Commission, company personnel detail the growth of Thor’s motorhome sales.
During its third fiscal quarter — which set a sales record of $1.05 billion companywide — Thor shipped 34.2 percent more motorhomes. During that same period of February through April, the overall market increase in wholesale motorhome shipments was 29.8 percent, so Thor helped skew the industry average up.
The average price for motorhomes rose 13.6 percent over the same quarter in 2012, with the top-end Class A motorhomes seeing a 17-percent jump in sales price. “The increase in the overall net price per unit within the Class A product line of 17.0 percent is primarily due to increased sales of the generally larger and more expensive diesel units rather than the more moderately priced gas units when compared to a year ago,” according to the quarterly report.
In an address to an investors conference last week in New York, Martin explained that motorhome growth is catching up. Towables grew first out of the recession because of their lower cost, though now credit restrictions have loosened enough to spur motorhome growth — though he noted that consumers cannot buy RVs with no money down, as was the case before the recession.
After Thor announced the purchase of the Wakarusa campus earlier this week, Martin said the timing worked out great because otherwise, they would have had to build new facilities to keep up with demand, and new construction would’ve taken more time.
Allied Specialty Vehicles, which bought the RV business from Navistar, decided to move motorized production out of Wakarusa to their Fleetwood facility in Decatur, south of Fort Wayne.
Martin said he hopes Thor Motor Coach will return from the current one production line in Wakarusa to the three lines that Monaco Coach once ran there. Those lines will supplement the Thor Motor Coach production lines in Elkhart, Martin said.
Keystone RV, Thor’s largest towable subsidiary, will use the paint facilities in Wakarusa, helping simplify logistics and reduce scheduling issues that sometimes crop up with outside vendors, who sometimes juggle orders from multiple customers.
The towable segment of Thor’s business continues to grow, too, with sales up 9.1 percent over the same quarter last year, and shipments for Thor up 4.6 percent over last year’s comparable quarter, according to the quarterly report.
In the long term, Thor’s management thinks the recreational vehicle industry — which makes up the bulk of their sales, which are rounded out by shuttle buses — is strong. In the report, they said, “we would expect to see incremental improvements in RV sales and expect to benefit from our ability to increase production to meet increasing demand.
“In recent years, the industry has benefited from growing retail sales to younger consumers with new product offerings targeted to younger, more active families.
“In addition, a positive longer-term outlook for the RV segment is supported by favorable demographics as more people reach the age brackets that historically have accounted for the bulk of retail RV sales. The number of consumers between the ages of 55 and 70 will total 56 million by 2020, 27 percent higher than in 2010 according to the RVIA.