... monster fish gobbling up all the smaller fish in the pond.
There are, of course, many ways of writing a simple story about big fish gobbling up smaller and tastier fish because it seems, by the news anyway, that’s what is happening everywhere. But that’s not our story. Our story is about how two monster RV manufacturers have gobbled many smaller RV manufacturers and the ramifications of this ‘trend’ to the RV consumer.
For those of you who don’t know, the big fish in the RV arena are Thor and Forest River. Together, these two companies have gobbled so many smaller fish that they are now building and selling 70% of all the RVs—motor homes and trailers—that are made available to RV buyers. The split is pretty much equal with each one trying to outdo the other—with no end in sight.
There are two smaller manufacturers who are struggling to move up or, at least, keep competing. With Jayco’s 12% and Winnebago’s 3%, a total of 85% of all RVs are built by the four leaders. The remaining 15% consist of 50 small RV builders—some of whom build the best RVs in the marketplace while controlling less than 1% of the market.
Now let’s get to why this trend is bad for the RV consumer. First of all, the quality and safety of RVs has historically been much better when built by the smaller builders. Unlike automobiles, RVs are, as a rule, more human-built than robot-built. Of course, this too will come to an end as our technology expands into a world where robots build everything.
But we are not in a robot’s world yet. Small manufacturers are still building the best RVs—RVs that we badly need. They often use techniques, such and screw and glue, that go back 40 to 60 years. As a rule, they build good motor homes and trailers because their sles are based on reputation; and without a reputation for quality, they will never prosper
Capitalism is a double-edged sword. With one edge we allow people to venture into an industry with anticipation that one day they’ll be much larger and more profitable. With the other edge we allow large manufactures to use their buying and advertising power to sway consumers away from where they got their roots. All this has happened in a blink of an eye—or, at least, while we slept.
But now, we know what happened and why. The recession just behind us scared the bejesus out of many small and midsize manufacturers. They saw many of their fellow RV builders close their doors because money was going one-way only. Some completely disappeared, some were purchased for less than 50 pennies on the dollar, and some survived. For those who survived, the after-jitters were constant. So when big investment companies came along and offered them 90 pennies on the dollar, some of them sold out and went to work as employees instead of owners.
It’s not a pretty picture, but it’s reality—it’s economics, it’s capitalism at work. Although we have to live with it, we don’t have to be led or pushed by the results to where we are damaged by past events. We can avoid this by knowing what has happened and its effects on the RV industry.
That is what RV CONFIDENTIAL is all about. In this series of newsletters you’ll learn everything we have learned about changes to the RV arena because of this trend. In RV CONFIDENTIAL #2 we’ll tell you who bought whom and then, with the help of many RV friends, in future issues we’ll show you how this trend is affecting your pocketbook and possibly your health. Together we are going to show and tell you exactly what you can do to avoid making costly mistakes.
Until next time,
JD and staff