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| Above, the California RV Show in Pomona. Photo by Armand Vaquer. |
The RV industry is currently booming. It is about to set a record of over 500,000 units for the first time ever.
Retiring baby boomers and younger generations are getting into the RV lifesyle. They tend to go for towable RVs instead of motorhomes.
According to the Wall Street Journal:
For anyone who has gotten stuck on a mountain road behind a massive recreational vehicle, get used to it, there are a lot more on the highway.
Recreational vehicles, ranging from bus-sized motor homes to retro trailers, have been a boom-and-bust industry since they first became popular in the early 1970s. Now a wave of retiring baby boomers and a surprisingly young new fan base have sent U.S. unit sales above their housing boom peak. Shares of the two leading manufacturers of RVs, Thor Industries THO -1.28% and smaller Winnebago Industries , WGO -1.37% each hit records last week.
The fundamentals—fuel prices, interest rates, disposable income and demographics—all look solid. That has the Recreation Vehicle Industry Association projecting a further jump this year and next. Despite that, delighted investors might want to unhitch themselves from these stocks. When things go badly for the economy, they go very badly for RV makers.
Shares of one-time industry leader Winnebago Industries plunged by 94% from peak to trough in the first 1970s energy crisis and by 78% in the second one. A lack of easy credit and consumer confidence can be just as devastating. Shares fell 92% between their housing boom peak and housing bust trough, while wholesale RV shipments fell by two-thirds.
To read more, go here.
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