RV Prices May be Stabilizing

Jack,

It's not just the RV industry with issues, right now I've got some major HD truck component suppliers with 16-18 week lead times for products that should be setting on their warehouse floor... and many others with order fill rates running around 80% or less. Many of the same brake, suspension and drive train components are used on our coaches. The just-in-time mentality of the major players has created a tremendous backlog for both the OEM's and aftermarket. As the sales increase, OEM's are not able to project sales as the market needs increase and don't want to warehouse additional product while they retool manufacturing. It's a catch 22 right now.

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Originally Posted by mikedee

....... Vegas real estate market ....... The better lower end property under $200 K is selling like crazy to cash buyers and cash investors. .........

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You rang?:cool:

I wholeheartedly agree with Jack.

Typically when a business is growing they can finance their increased production (that means increases in inventory, work in progress, and receivables) through cash flow or a line of credit. Money is tight during growth periods as all businessmen know.

But when the growth stops and the business contracts, the business is depleting inventory, its receivables are shrinking but still providing cash flow, and because most business owners do not like laying off people they spend more than they should leaving themselves ill prepared financially for the upturn in business. Those businesses that still survive now have little cash, little inventory, lousy financial statements and balance sheets, and are struggling to find capital to finance the new demands of the market because the indicators the banks look at to increase the lines of credit all look crappy.

Getting out of this situation is going to be tough and long term. The good news is if the converters and manufacturers of coaches are going to struggle to match market demand there may become more buyers than product and prices will not only stabilize, they may actually climb until production rates can match demand. We can only hope. Now may be the perfect time to buy.

Orren,I agree that some basic parts are in short supply,I have had problems in the past year buying items such as bearings,belts,etc.for my rebuild shop,if I needed 2-4 of an item I could always get it but if I needed 10-20 they were usually back ordered.I was really surprised at the optimism at Tiffin,and it is for real.