Q3 RV Sales Rise in Q3 as More Americans Hit the Open (and Off) Road
At first glance, analysis of motorcycle and recreational vehicles (RV) sales in 3Q 20 closely resembled 2Q performance: strong for off-road vehicles (ORVs) and towable RV trailers, weak for motorcycles. But look a little closer at the data, and you discover some reason for optimism among motorcycle manufacturers and dealers.
As they have been all year, motorcycle sales were weak in Q3. But they did rise from the Q2 2020 trough. For example, sales of Polaris motorcycles, including its Slingshot and Indian models, were up +10% Y/Y — a marked improvement over the -39% Q2 Y/Y number.
As motorcycle sales puttered along in first gear, ORVs and towable RV trailers accelerated into the passing lane as consumers continued to center their summer vacation and travel plans on outdoor activities.
Polaris (PII) ORV sales track +30% Y/Y for the third quarter 2020 QTD. Based on the current run rate that blends +30% Y/Y growth for ORV and +10% Y/Y growth for motorcycles, we project Polaris North America retail sales to be up +28% Y/Y for 3Q20.
Industry towable RV Trailers sales continue to be strong with industry up +16% Y/Y QTD, and if you’re planning an end-of-summer road trip, you may see more models with the Winnebego logo on the highways and parked at campgrounds. Winnebago (WGO) continues to gain market share, accounting for 13% of the new towable market, while Thor (THO ) has seen its market share in new RV sales decline.
In their most recent earnings report on Sept. 28, 2020, Thor’s management noted inventory at the dealership is well below normal stocking levels, which has resulted in increased dealer orders and a backlog. The company expects shipment of +19.5% Y/Y in 2021 to satiate demand and fill inventory. Investors leveraging 7Park’s dataset would find the data suggesting towable retail sales in line with management’s comment of strong retail sales and low inventory at the dealership channel.
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