RV dealers facing slowdown as economy stifles demand

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RV dealers facing slowdown as economy stifles demand

Pittsburgh Business Times - by Ben Semmes

It’s no holiday for the region’s RV dealers this summer.

Facing surging gas prices and a sputtering national economy, some recreational vehicle dealers say they are facing slow sales while at least one local shop is in bankruptcy proceedings.

Belle Vernon-based Cavalier Coach RV Inc. filed for Chapter 11 bankruptcy protection earlier this month. The company estimates its liability is between $1 million and $10 million.

“The whole RV industry is … a calamity,” said Robert Lampl, the Downtown-based attorney representing Cavalier Coach. “Obviously, it is gas and the general jitters about the economy.”

Cavalier Coach President Paul Ventrice did not return calls requesting comment, but Lampl said the company is looking to reorganize so it “can weather the storm and figure a way to come back out of it.”

Ed Majors, president of Harmony-based RV dealer Hufnagel & Majors Inc., has survived the ups and downs of economic cycles for more than 40 years.

Majors said his company, which has seen sales drop by 20 percent to 30 percent this year, is focusing on selling smaller vehicles and trailers, which are cheaper and require less gasoline to operate.

“You change with the times,” he said.

Majors said he believes it is primarily the weak economy, not gas prices, that is suppressing consumer appetite for recreational vehicles.

Judy Reeger, co-owner of Apollo-based Schreck RV Inc., said while her servicing, parts and accessories business is steady, the company’s trailer sales are off a third from last year.

“We have never seen it this bad in 31 years,” Reeger said.

Phil Ingrassia, a spokesman with the Fairfax, Va.-based Recreation Vehicle Dealers Association, agreed.

“It’s decline driven by an overall slowing of the economy,” said Ingrassia, whose organization counts about 3,000 members nationwide.

Wholesale RV shipments were down 17.1 percent through the first half of the year, and Ingrassia said many dealers are moving to products that are selling a little better, such as lightweight trailers. Rentals also are increasing in popularity.

Recreational vehicles range in price from $5,000 for a basic trailer to more than $500,000 for a high-end mobile home. A vehicle’s fuel efficiency could be as little as 8 miles per gallon for a large mobile home, or as much as 22 miles per gallon for a smaller RV.

Discretionary spending for items such as a recreational vehicle and extra fuel, Ingrassia said, is bound to fall “when people aren’t feeling good about their 401(k).”