The Great Recession that began in 2008 had a crushing effect on RV manufacturers, as the recreational vehicle became something that many middle-class families and retirees could no longer afford. Sales plunged, and in some cases companies went belly up.
Fortunately, Forest River, a wholly-owned unit of Berkshire Hathaway, not only had Berkshire’s mountain of cash to weather the downturn, but was even able to pick up some key bolt-on acquisitions during the recession.
In 2008, Forest River acquired leading RV manufacturer Coachman RV for next to nothing when the company ran into severe cash flow problems.
Less than a decade later, Coachman RV is one of Forest River’s plum divisions that is helping it post the strongest sales numbers since before the recession.
Forest River’s sales have grown steadily since 2009, with six straight years of sales increases.
The great news is that Forest River’s sales have finally recovered to pre-recession levels.
Industry-wide, 2015’s recreational vehicle shipments reached 374,246 total units, and on a month-to-month comparison, November 2015 had a 3.9 percent increase above November 2014, and December 2015 achieved an even more impressive 4.8 percent growth as compared to December 2014.
The sales figures meant the strongest December total in ten years. Additionally, all months last year except May and July were up over the comparable months in 2014.
The increases are industry-wide, as manufacturers such as Thor Motor Coach and Fleetwood RV have seen similar increases, and the growth was across all classes of recreational vehicles.
Specifically, Class A motorhomes, which are the largest, most luxurious and expensive, grew modestly with a 0.2 percent increase over 2014. Class B RVs, which are camping van conversions or van campers, had a 9.8 percent increase, and Class C motorhomes, which are truck-chassis-mounted vehicles that are more modestly priced than Class A, achieved the biggest growth increase overall at 15.8 percent.
“We have erased the dip caused by the Great Recession with RV shipments nearing record levels,” said Frank Hugelmeyer. President of the RVIA – Recreation Vehicle Industry Association, at the industry’s National RV Trade Show. “Fueled by low interest rates, affordable gas and steady consumer confidence, RV shipments should reach 375,000 units next year. But beyond the strong short term outlook, we can all rejoice that RVs continue to gain popularity in the outdoor marketplace and are seen as ‘cool’ in traditional and social media.”
Total recreational vehicle sales industry-wide are projected to reach 375,000 units in 2016, according to the RVIA.
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.