Manufactured Housing
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Industry Overview
In the US about 200 companies make manufactured housing (MH)--previously called “mobile homes”-- with combined annual sales of about $7 billion. Large manufacturers include Champion Enterprises, Fleetwood Enterprises, and Clayton Homes. The industry is highly concentrated: the top 20 manufacturers account for more than 80 percent of production.
Competitive Landscape
The high cost of conventional housing and the availability of credit drive demand for manufactured housing. The profitability of individual companies depends on efficient operations and access to dealers. Large companies benefit in distribution, the creation of large dealer networks, and ability to locate factories close to dealers. Small companies can compete successfully in local markets.
The industry contracted sharply from 1997 to 2002, with annual revenue falling from $10 to $7 billion, as high default and foreclosure rates prompted lenders to leave the industry.
Products, Operations & Technology
The industry manufactures single- or double-wide rectangular housing units, which are later installed on a site to form a dwelling. The resulting house may consist of a single or several units -- called floors, even though they sit side-by-side -- fastened together at the installation site. Units cost from $15,000 to $170,000 and range from 400 to 4,000 square feet. A large majority are double-wide instead of single width. Most have three or more bedrooms, two full bathrooms, central air conditioning, and average 1,500 square feet.
Manufactured housing is built on assembly lines in factories, generally using the same materials as for a site-built house. The efficiency of working in standardized fashion in a controlled environment substantially reduces construction costs. Manufacturing costs are about $30 per square foot, versus $60 per square foot or more for a site-built house. A unit can be assembled in one or two days from various pre-assembled components. All units are built on a permanent steel chassis (Ford is the largest supplier) that allows the finished unit to be transported to the installation site, where it is placed on a foundation (most often concrete blocks), and secured with tiedown straps. Some units are placed on permanent masonry foundations.
The manufacturing operation is a highly streamlined process that uses computer technology. Designers use computer-aided-design (CAD) software to create house designs. The shop floor operations use computer-aided-manufacturing (CAM) software.