Many Americans still can't wait to get on the road again. They just can't afford it.
Buying a motorized or towed recreational vehicle has become a daunting prospect for those who long to see the country at their own pace while surrounded by their own living space.
Financing has dried up as quickly as the equity in many homes -- the kind without wheels. Some people who might have the means to buy an RV are loath to commit $40,000 to $280,000 on a depreciating asset in a dismal economic climate. And the prospect of spending $315 to $675 to fill up a vehicle that gets seven miles per gallon isn't a big draw, either.
The evidence was on clear display in the latest quarterly earnings report from one of the nation's biggest RV manufacturers, Fleetwood Enterprises Inc. of Riverside.
Although the company swung to a profit, Fleetwood got there with the help of one-time asset sales and severe cost cutting. Sales of the company's recreational vehicles and manufactured homes were sharply lower, even though Fleetwood enjoys the kind of fierce customer loyalty that would make the Big Three automakers swoon.
The combined effects of record fuel prices, tight loan credit, consumer anxiety and the real estate collapse have made this the worst time for RV manufacturers in nearly three decades.
"There's really nothing good happening in this industry," said Christian Eddleman, an analyst with Argus Research. "It's rare that someone has to go out and buy an RV. It's the definition of a discretionary purchase."
The luxury vacation-on-wheels giants include Fleetwood; Thor Industries Inc. of Jackson Center, Ohio, which carries the familiar Airstream brand; Winnebago Industries Inc. of Forest City, Iowa; Coburg, Ore.-based Monaco Coach Corp.; and Coachmen Industries Inc. of Middlebury, Ind. As a group, they are struggling to jump-start sales and surviving on old orders to keep factories going, analysts said.
Steep decline
In the first four months of this year, purchases of motorized recreational vehicles fell 26% nationally, to 11,860 from 16,065 in the same period a year earlier, according to Statistical Surveys Inc. of Grand Rapids, Mich., which tracks new-vehicle sales for the RV industry. Purchases of trailers, which are less expensive, were down 16% in the first four months of 2008 compared with the same period last year, to 67,167 from 80,342.
