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Smart Shopper Purchasing Motorhomes
190 messages, Last post on Aug 31, 2009 at 7:28 PM
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Replying to: mark156 (Jul 31, 2008 1:25 pm) A dealer will go out of business even faster if they sell WAY below cost!!! They need to unload their "bad" merchandise (i.e. gas guzzlers) before the market for these vehicles gets even worse or disappears entirely. As you correctly pointed out, RV's and any other vehicle are depreciating assets, losing value every day they sit on a dealer lot. In the market we are in, the dealers likely have two options... 1) Get rid of these depreciating assets NOW at a relatively small loss, while they are still worth something and buyers are there. 2) Hold out for a profit on these vehicles and pray that a buyer will come in who is willing to pay that price. If #2 doesn't work out, the dealer will fold much sooner than if he had used #1. If it's between losing $5K and getting the unit off your lot now, or potentially losing ~$50K by having it sit on the lot waiting for a non-existent profitable buyer, which would you choose? Making a profit on these vehicles, in this market, is a tough proposition. Instead of a profit, the decision may be more like "lose a little or lose a lot."
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Replying to: mattgg1 (Aug 01, 2008 5:19 am) So many variables factor into that constantly changing figure, from the floor plan cost to the price of the daily donuts. Because you're told it's being sold at a loss doesn't necessarily make it so. The wringing of the salesman's hands in supposed financial pain is a notoriously unreliable guide.  Secondly, RVs and especially Class As are probably one of the consumer vehicle types that are least affected by the cost of gas. Most buyers usually have a high net worth and a high disposable income. I don't see the market disappearing any time soon, though it may thin out in the middle with high end and low end taking the bulk of the sales.
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Replying to: mac24 (Aug 01, 2008 6:18 am) "I think that there are two issues here. First is the matter of true dealer cost, a figure only known to the dealer principal (and possibility his accountant)..." Everything you say here is a fact and I don't think anyone would dispute it, but it really has nothing to do with the point of my last post. Are you saying that RV/Travel Trailer/Truck/SUV manufacturers are not being forced to sell this distressed merchandise for a loss in many cases? That is the point I am making. "Secondly, RVs and especially Class As are probably one of the consumer vehicle types that are least affected by the cost of gas. Most buyers usually have a high net worth and a high disposable income. I don't see the market disappearing any time soon, though it may thin out in the middle with high end and low end taking the bulk of the sales. You are defining a much narrower market than I was. My point was much broader...basically any expensive, fuel thirsty vehicle (any type of RV, travel trailer, SUV, truck). The average purchaser of these types of vehicles definitely does NOT have a high net worth. Secondly, although you mention these types of vehicles are "least affected by the cost of gas", they are affected by the overall economy, housing market and general economic uncertainty. You mention that you don't see the market "disappearing" anytime soon and it may "thin out" a little, but I think you are overstating viability in this market. Of course RV's will not disappear completely, but they are in for some very hard times. All you have to do is look at the number of RV/travel trailer manufacturers who have gone out of business recently and the production cutbacks of those who are still in business. GM lost $15 billion dollars in one quarter!!! Ford lost nearly $9 billion. Do you honestly think RV manufacturers are in a better position to make money in this market?
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Replying to: mattgg1 (Aug 01, 2008 7:59 am) No, the point I was making is that you'll never know if they were being sold at a loss, or at least not until the final accounting after bankruptcy. "You are defining a much narrower market than I was. My point was much broader...basically any expensive, fuel thirsty vehicle (any type of RV, travel trailer, SUV, truck). The average purchaser of these types of vehicles definitely does NOT have a high net worth." That's because this is a 'Motorhomes' discussion, which implies Class A, coachbuilt, high-end etc. I certainly agree that economic status of those buyers is much different to the average purchaser of travel trailers, SUVs and trucks. "GM lost $15 billion dollars in one quarter!!! Ford lost nearly $9 billion. Do you honestly think RV manufacturers are in a better position to make money in this market?" Absolutely, or at least the savvy ones will. I stand by what I said before. I think the market will polarize. There will always be a low end, maybe even an unfinished shell for the customer to fit out himself. There will always be a high end, and there's a lot of money to be made there, whether it's RVs, cars, or boats. It's always easier for a small manufacturer or business to reposition itself in the marketplace than it is for a large one. Everything can be done more quickly, from making and implementing decisions, to changing product lines, to adjusting workforce levels, even to physical relocation. Things are very different for the likes of Ford and GM. Overall, I'm sure total sales will be down. But for the manufacturers and dealers that remain, the profits will continue to be there, maybe even more so. I think that the decrease in both manufacturers and dealers will be in the volume market, where large numbers were being sold for a minimal profit on each unit. Big is good in a growing economy, small is better in a shrinking one.
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Replying to: mac24 (Aug 01, 2008 8:49 am) The definition of a "motorhome" is any motorized vehicle that is equipped with self-contained living quarters. This would include Class A, Class B or Class C, which can vary in price from ~$30K to $3 million. So potential buyers of motorhomes are from all economic levels, just just the rich. "It's always easier for a small manufacturer or business to reposition itself in the marketplace than it is for a large one. Everything can be done more quickly, from making and implementing decisions, to changing product lines, to adjusting workforce levels, even to physical relocation. Things are very different for the likes of Ford and GM." If a small business does not have large sums of cash on hand, then they are not going to be able to do all of the things you mention above. Re-tooling an entire manufacturing process/product line, or relocating your entire facility, costs lots of money. How is a small business without the the cash reserves (like GM) going to pay for that? If this was the case, then why are all of these companies going out of business? "Overall, I'm sure total sales will be down. But for the manufacturers and dealers that remain, the profits will continue to be there, maybe even more so. I think that the decrease in both manufacturers and dealers will be in the volume market, where large numbers were being sold for a minimal profit on each unit." You made my point...total sales will be down...that is all I am saying here. Of course, the few manufacturers and dealers that remain will be able to make money, because everyone else has gone out of business. I think you would agree, at a macro level, the RV industry as a whole is in bad shape right now and will continue to be if market conditions stay as they are. Overall, units sold/sales prices/profits will go down and companies will go belly up. |
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I think we'll have to accept that we agree on some points and disagree on others. For instance, I believe that small companies can always be more flexible and act more quickly than large ones, and that large cash reserves are not required to do so. If funds are required to change course, then there are many differing sources of finance available other than writing a check. However, we certainly agree that total sales will be down, as they will be for almost all major discretionary purchases. Almost every industry in the current economy is suffering right now, except for those providing essential goods and services (and maybe those who provide comfort and feel-good items like chocolate and cookies  ).
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To me, finding 'cost' prices for RV's is similar to trying to find cost for cars in the 1950s. There is NO information like there is for the regular automobile today. Also, the warranties are basically one year on the house, three years on the chassis and five years on the engine (my RV personally). A year goes by SO fast that it's hard to find a problem until the year is gone. Traveling down our American highways will jar your teeth! Since we generally travel in the right lane, it can be rougher and some potholes you can't avoid. Sometimes I'm amazed that the Motorhome stays together as well as they do from all the vibration/bumps/potholes. Currently, I have my RV in the shop for maintenance (lube the chassis, fix a bay door lock, caulk a window, etc). I ran out to the facility as I needed to get something out of the closet. The RV should be ready on Monday. I was surprised that there were customers on the lot. It's not totally dead! I would really like to know what the raw cost of my RV on completion. We received 22% off MSRP on a 2008 unit in January of 2007 (special order). So, that was $101,000 off list. MM.
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Replying to: mark156 (Aug 02, 2008 3:43 pm) ................I would really like to know what the raw cost of my RV on completion. We received 22% off MSRP on a 2008 unit in January of 2007 (special order). So, that was $101,000 off list. As we all know, the invoice pricing information on regular autos bears no real relation to dealer cost, but at least it's a starting point. However, allowing for the fact that people sometimes exaggerate the deals they get, we do now have forums and mailing lists that weren't available in the fifties to talk with others that might have made a deal on similar RV. That 22% sounds like a good deal to me, and it probably sounds like a great deal to the guy that got 15%, though the guy that says he got 30% probably isn't so impressed! The real price you paid can only be measured after it's sold, and if at that time you can say that the total cost of ownership was good value for the times spent in it, then you got a good deal. Until then it's probably best not to think about it.
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Replying to: mark156 (Aug 02, 2008 3:43 pm) 
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Replying to: euphonium (Aug 02, 2008 7:32 pm) I did look at Country Coach and in comparison, I liked the Monaco better. Every CC that I saw that had a dishwasher, it was hidden behind two cabinet doors which looked like an after thought. The CC does not have the automatic entry sealing door (no wind noise). All the CC that I looked at were 2007's, it could be that the 2008's changed some of their features. Another deciding factor was that the Monaco dealers are near my house in California and in Tennessee. The dealer in California where I looked at the CC is now owned by my Monaco dealer. I have no idea where the service facility was for CC. Mark |
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