Recreational Vehicle Manufacture
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Industry Overview
The US recreational vehicle (RV) manufacturing industry consists of about 800 companies with combined annual revenue of $12 billion. Major companies include Fleetwood, Thor, and Winnebago. The industry is highly concentrated: the 20 largest manufacturers generate about 80 percent of revenue.
Competitive Landscape
Demand is driven by consumer income and demographics, as RV buyers are mainly older. The profitability of individual companies depends on the ability to design desirable products. Large companies have economies of scale in production and distribution. Small companies can compete successfully by concentrating on a product line or by specializing in components.
Products, Operations & Technology
Major products are motor homes, travel trailers, and folding (or "camping") trailers. Motor homes account for about 45 percent of industry revenue, travel trailers for 45 percent, and folding trailers for 10 percent. Some manufacturers also make "park" models, which are essentially small mobile homes.
Motor homes are complete, self-propelled units. Travel trailers are complete units that must be towed by a car or truck. "Fifth-wheel" trailers are towed from a mount in a pick-up truck and extend over the bed of the truck. Folding trailers have walls that unfold to form the camping unit. Within the motor home segment, Class A models are full-size units built on a medium-duty truck chassis, while Class C models are smaller units built on a van chassis. Motor homes range from 16 to 40 feet long.
RVs are built on truck or van chassis bought from suppliers like GM and Ford. A chassis basically includes the frame, suspension, exhaust system, brakes, engine, transmission, rear axle, drive train, fuel system, wheels, and tires. A chassis with engine is the largest single manufacturing cost for motor homes. Aluminum panels and extrusions, insulation, plumbing, wiring, cabinets, and appliances are also major cost items. Large manufacturers produce many of the components themselves and may also supply other manufacturers.
The major manufacturers produce a number of models and sizes of RVs under various brand names. Production facilities operate assembly lines that can be fairly easily reconfigured to produce different models. Production runs are fairly small. In 2008, Winnebago, the largest motor home manufacturer, built about 6,400 units under 23 model names. Production is usually started only after dealer orders are received. Many manufacturers have a backlog of orders.
Computers are used to manage the large number of parts and to design new models.
