Country Coach May be Closing

[Denny]

Bruce,

I think you are 100% correct. It is a basic principle of supply and demand; the less supply the higher the price. Once the new coach buyers and nearly new buyers dry up the existing market at those great prices than the field is level again. I think when the person who buys a 2 million dollar coach for a million goes to sell it, he is not going to base his selling price on the million he paid for it but on the original price of 2 million. He is going to take advantage of his good find and not pass it on to the next buyer.

This then starts the process of bringing up the rest of the prices. I feel, and it is my opinion and we all know about opinions, that our buses will start to increase in price once the economy starts to turn around.

[Alek&Lucia]

Jim,

I agree with Bruce, and others in this subject. Don't touch the pricing guide.
It is very helpful for insurance quotes, and also if you check around, private sellers and dealers of good buses are still asking and getting those prices that are posted in the guide. If we change the guide to lower prices we will be in the bracket equal with Essex, HR Navigators, Monaco Signatures, Travel Supremes etc etc etc.
Let's concentrate on good maintenance of our toys, having fun with them, that when the buyer will come they will be in the top shape to sell,

Alek

[0533]

I would rather not play "Aint It awful" but rather look at the facts.

These buses will always only be right for a handful of lets say eccentric folks who want and understand that we all only go around once in life.

If the universe of current and future Bus buyers is limited to a fraction of the RV buying public, lets say that there are 100,000 (less now) Rv's sold each year (just a round #) I would suggest that the Prevost buyer represents less than 1/2 of 1% or around 500 active customers per year, this may be high. This small number does not require a mass market approach including setting retail pricing.

Our buses are for a handful of people who really want to own something special.

If we devalue our Prevost buses down to the current RV marketplace level, lets say 40% or more off last year, not unreasonable number, then our buses run the risk of becoming a pile of Stainless that ends up in the Eagle category mostly gone for ever at some point.

Prevost Car will not be making the XL model much longer, I bet the H model will become the standard. Prevost Car has to become more practical including simplifying the production line and reducing costs, parts and making service and warrantee work less costly. They will have to turn their attention to the seated market who wants only the H model, a lot for less.

If I were in charge at Prevost, I would make this change now. Prevost has more warrantee issues by 10 fold with the RV shells than the seated coaches. I was told that Detroit will no longer supply engines to Volvo, this alone will bring about change.

If we all play it right our buses will hold a special place in history and if we keep each at a high standard of quality the entire Prevost used market will keep its value.

Our buses have to stay in the hands of people who will keep them as the special pieces of history that each is, it is in our hands, so consider the risk and rewards.

[garyde]

The Market is the Market. No one can control the Market. Right now, its favoring buyers by a lot. 3 years from now , who knows. Inflation will be up because of all of the Govt. spending. So prices will rise.
Right now, its a great time to buy for those who are aching to buy a Prevost and have the funds. There is not much down side for these folks.
For the rest of us, "hold onto to your seats, its going to be a bumpy ride"

[Tully]

Let's not forget that even though this is a "buyers market" for a bus or home- it is a double edge sword. It is never just that simple.

Factor in very difficult financing to this. Yea, you can get things cheap but even so- getting money to finance is very hard. Even if you have good credit.

Look at the Fico score. 700 used to be "A" paper. Now many mortgage companies and lenders require a 740! to be the starting point for "A" paper. One can almost kiss good by getting a home equity loan as one either has negative equity or is at a break even point. Those who have equity are using what little they have to hold off the fast depreciation our homes and property are taking.

This is the check and balance.

If you cash heavy then right now is the perfect time.

If you are dependent on a loan from a bank or lending institution- then hold on for the bumpy ride.

It is going to be several years before things calm down. NO one has the answer. Speculation is all we have.

The Prevost bus is unique. But like all things is in for a wild ride during these strange and uncertain times.

Tully

[ajhaig]

I don't see the harm in having a pricing guide, I don't think that POG necessarily sets the market and the price ranges are wide enough to account for condition. The current POG valuations are way off the market, so the pricing guide should either be scrapped or updated.

I wouldn't bank on a "recovery" in coach values, but the pricing guide could be adjusted upwards in that unlikely event. These are depreciating assets under the best of circumstances.

At the end of the day I believe that we are living through a deflationary event, high end coaches are not immune. If you own a coach forget about the valuation and drive the wheels off the thing, I sure miss ours.

[0533]

Maybe I do not fully understand the rational behind the need to create a new market valuation chart on our buses, why do we need to share with the rest of the world that our buses are worth less than last year.

The largest Prevost converter Marathon appears to have at least 18 new coaches and about the same Certified Preowned 2008 to about 2004, which I believe are their trades. maybe $25M in cash tied up, lots of $$

If this is the case and the market is about 50% off or more on RV sales right now, Marathon possibly has enough inventory for the rest of 2009, They may buy 15 or 20 shells to have for custom orders but I bet not much more.

If these numbers are anywhere near accurate then the next few years at Marathon and the top 3 or four converters will be the same.

These converters will have to change direction and quickly to stay afloat for the next few years. They will reduce new sales down to a handful until the market returns, create a sellers market on new coaches, increase the value on used coaches. If these companies want to survive they must sell both new and used for higher prices with fewer units. The big three will become better used coach salesman and will need to hold the prices up to stay in business.

I want to ride their coattails and let them set the market pricing not us. I for one would not want to see a pricing change or even a pricing guide. Let the market handle this.

Please help me here, am I missing something or is there a compelling reason or value to each POG member to communicate the fact that our bus values may have taken a hit, help me on this.

The converter industry went to great lengths to be delisted in NADA, Kelly, Edmunds and others, why would we want to create a new downward valuation trend, it makes no sense, it's not like we required to file a report each year.

Lets at least table this nonsense for the next 12 months and see how this all shakes out.

[phorner]

The way I see it, my bus is only worth whatever someone else is willing to pay for it, and then, only when I'm ready to sell. Until I actually sell it, I haven't lost anything, except perhaps on a balance sheet.

The good news is that the Prevost busses represent a very small percentage of the RV industry on a whole, so I see that as an advantage. There are only so many to go around, and the used bus factory is closed.

The bad news is that the potential buyers are either holding onto their money or can't get financing, although financing IS available on a somewhat limited basis.

I am not seeking a buyer, so I can afford to take a wait-and-see approach.

However, I agree that nothing good comes from de-valuing our Prevost busses based on some arbitrary "market" value that will undoubtedly change anyway, ultimately based on demand.

My plan is to simply enjoy the lifestyle that so few get to actually experience.

Cheers,

[ajhaig]

It's not a closely guarded secret that coach values are down and perhaps we are putting too much weight into the importance of the POG Pricing Guide.

If Jim wants to maintain his credibility within the Prevost conversion community then the prices should be consistent with the current market values, they shouldn't be someone's attempt at forecasting what future prices will be. I can say with a high degree of confidence that the POG Pricing Guide for older vintage coaches is off by about 50%.

The two biggest converters are privately held so I have no idea what their balance sheets look like, but if they are at all leveraged I have a hard time seeing them survive this downturn in their current form. I hope they do survive because I plan on buying another coach at some point.

[Ray Davis]

I hope they do survive because I plan on buying another coach at some point.

That's wonderful news! I hope we get to see you guys (and the Red Storm) again at some time in the not too distant future!

Ray