The RV Industry Death Spiral - A Series of Articles Worth Reading

[jddelano]

I've been researching RVs for a while now and am frustrated by the poor RV manufacturing quality at all levels and lack of customer service (to mention just two frustrations).

I recently read an interesting eight-part series of articles entitled: "The RV Industry Death Spiral," written by Greg Gerber, a RV journalist for the RV Daily Report and an RV owner. His observations put a voice to the frustration I have as someone who wants to purchase a quality, full-time RV and enjoy it for as long as I can without the frustrations over quality I've read on the various RV forums (including this one).

I've noticed when prospective RVers express in public forums, or privately to other RVers their concerns over quality; or RV owners who experience catastrophic failures, one after another, rant off about poor quality and service, they're often met by a lot of "group think" responses that attempt to explain away or justify the dismal performance of the RV industry. Greg attempts to present a much more balance assessment (in my opinion) to the problems and some insights and possible solutions to their causes. I think I better understand some of the factors involved having read these articles and hopefully that will help me in my continued search.

Here's the links to each of the articles:

Part 1: Opinion: The RV industry death spiral: http://rvdailyreport.com/opinion/opinion-the-rv-industry-death-spiral-part-1/

Part 2: Manufactures in race to the bottom: http://rvdailyreport.com/opinion/rv-death-spiral-manufacturers-in-race-to-the-bottom/

Part 3: Suppliers in a tough spot: http://rvdailyreport.com/opinion/rv-death-spiral-suppliers-in-a-tough-spot/

Part 4: Dealer drop the ball on service: http://rvdailyreport.com/opinion/rv-industry-death-spiral-part-4-dealers-drop-the-ball-on-service/

Part 5: Campgrounds loosing capacity: http://rvdailyreport.com/opinion/rv-industry-death-spiral-part-5-campgrounds-losing-capacity/

Part 6: Associations can influence change: http://rvdailyreport.com/opinion/rv-industry-death-spiral-part-6-associations-can-influence-change/

Part 7: RV owners share the blame: http://rvdailyreport.com/opinion/rv-industry-death-spiral-part-7-rv-owners-share-the-blame/

Part 8: RV media falls asleep: http://rvdailyreport.com/opinion/rv-industry-death-spiral-part-8-rv-media-falls-asleep/

I have no affiliation to this author or the RV Daily Report. Nor do I wish to rant against any element of the RV industry--I'm just a prospective owner who found some insights and a voice for the exasperation he's been feeling lately regarding his search for an RV.

Dave
Chesapeake, VA

 

[danemayer]

Just read the entire series. "Death Spiral" is a provocative title. But I didn't find much in the way of explanation of how this death spiral will occur.

Interestingly, he mentions Evergreen RV recently going out of business. Here's a link to a much touted quality program that Evergreen initiated about a year ago. Although Evergreen apparently embraced many of Gerber's ideas, doing so didn't help them stay in business. I'm sure we can all wave that away by saying that Evergreen's closing was due to many varied factors. Yet, they were doing exactly what he wants every company to do. Kind of seems like a contrary proof-point.

I remember reading about that Quality Inspection program and doing back-of-the-envelope math on cost of the people, the building, etc. and estimating how many additional RVs they would have to sell to pay for the program. A lot of people might argue that quality pays for itself by eliminating post-delivery warranty claims costs. But an extra building and a lot of extra people at the end of the line may actually cost more than paying dealers to do the work. Is it good for the buyer? Sure - as long as the company doesn't close its doors.

Anyway, Evergreen is out of business. I wonder if Evergreen owners are worried about future support, resale value, and things like that.

And I wonder which company will adopt the same idea next and what will happen to them.

 

[kowAlski631]

If you're looking for a perfectly made product with no defects of any size that will remain perfect through the years with only minimal upkeep, it doesn't exist. We owned large boats (40'+) and had problems with them also - believe me when I say that they cost significantly more than our BH. We found a floor plan we liked with support after the sale from the manufacturer AND this forum and bought it. No regrets. What if the manufacturer goes out of business? It happens in all sectors and you find work arounds.

Now we're getting ready to leave on another trip in our trailer. Have a good search.

Martha

 

[alwaysbusy]

Hi Dave,
Thanks for your thread. Please allow me to encourage you to be open minded and cautious in taking Mr. Greg's articles as the gospel so to speak. Nor do you want to take his opinions as the opinions of all. Certainly you could find those who have a dissenting one.

At the end of the day, you are looking for a good quality coach. To echo Ms. Martha's thread and something I read here and repeated often, if someone is in the market for a coach and doesn't want to deal with warranty work, fixes, repairs, etc., they shouldn't buy one. It's like someone wanting to tow a camper and get good gas mileage, there's no such thing. While we can argue over what make is better, we all have tow vehicles with a hose running from our engine to our wallet. There is no perfect coach, just as there is not perfect car, truck or house. No matter what make, no matter what model, even Heartland, it comes with the territory.

 

[diesel_doberman]

I read the multiple parts...sounded like an on going rant.


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[brianlajoie]

How long is a new house warranty? How long is a new car warranty? If you build a product that your customer can afford, how perfect does it have to be?

I've had warranty issues with my truck, my home and my trailer. The problem this article and most people perceptions are that there are lots of problems, when the forum volume (by new trailer sales) doesn't support it. There are sure to be problems, but are we hearing major issues or major squeaky wheels?

The biggest problem I have with Mr. Gerber is that he is trying to sell you on the fact he is an uninterested party. He is editor and owner of the RV daily report. He has a major conflict of interest with trying to be all gloom and doom so buy his report. He is looking for buzz.

The industry counts on and people support a less than perfect product at the right price. If not, then the industry would sprout product perfect companies. Problem is, I've read in this forum that most people get married to their trailer over features, not quality. It is amazing when I go to shows and see the number of people ogle over features comparing trailers and manufacturers, but ask few questions about quality.

 

[Sarge]

Seems unbiased to me.

Not sure how anyone would benefit from creating a fake outrage or hyping doom and gloom - But if he's so negative about the entire industry -

Why not choose a different hobby?

 

[rhodies1]

Just read the entire series. "Death Spiral" is a provocative title. But I didn't find much in the way of explanation of how this death spiral will occur.

Interestingly, he mentions Evergreen RV recently going out of business. Here's a link to a much touted quality program that Evergreen initiated about a year ago. Although Evergreen apparently embraced many of Gerber's ideas, doing so didn't help them stay in business. I'm sure we can all wave that away by saying that Evergreen's closing was due to many varied factors. Yet, they were doing exactly what he wants every company to do. Kind of seems like a contrary proof-point.

I remember reading about that Quality Inspection program and doing back-of-the-envelope math on cost of the people, the building, etc. and estimating how many additional RVs they would have to sell to pay for the program. A lot of people might argue that quality pays for itself by eliminating post-delivery warranty claims costs. But an extra building and a lot of extra people at the end of the line may actually cost more than paying dealers to do the work. Is it good for the buyer? Sure - as long as the company doesn't close its doors.

Anyway, Evergreen is out of business. I wonder if Evergreen owners are worried about future support, resale value, and things like that.

And I wonder which company will adopt the same idea next and what will happen to them.

I believe Evergreens dimise was based on the fact that they wanted to build a better product,which they did but couldn't price it in the same market as all of the rest of the units out there for sale,unfortunately MOST all other units are owned by one big company and they don,t care,it's we have to the market captured and try and compete.
This is why there is no quality control,they don,t need to worry about it, I have always said,an RV is the most expensive junk we purchase, but it took the auto industry along time to realize that there's foreign competition lurking in the weeds,hopefully this scene will appear in the RV industry.
Quality does not cost more..... It makes you money, it helps eliminates the after sale warranty repairs which are the driving factors on why RVS cost so much.

 

[TravelTiger]

Augusta RV is supposedly trying the "quality" approach, pulling out of dealers and selling direct to the public so they control everything.


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[kowAlski631]

I believe Evergreens dimise was based on the fact that they wanted to build a better product,which they did but couldn't price it in the same market as all of the rest of the units out there for sale,unfortunately MOST all other units are owned by one big company and they don,t care,it's we have to the market captured and try and compete.
This is why there is no quality control,they don,t need to worry about it, I have always said,an RV is the most expensive junk we purchase, but it took the auto industry along time to realize that there's foreign competition lurking in the weeds,hopefully this scene will appear in the RV industry.
Quality does not cost more..... It makes you money, it helps eliminates the after sale warranty repairs which are the driving factors on why RVS cost so much.

Sorry to disagree, but manufacturers do care - otherwise there'd be no repeat business. RVs are not the most expensive "junk" we purchase - if you'd ever been in the bilge of or had a large boat hauled out for repairs, you'd agree.

Martha

 

[danemayer]

Quality does not cost more..... It makes you money, it helps eliminates the after sale warranty repairs which are the driving factors on why RVS cost so much.

I've heard comments like this for decades. But never from the people in the business responsible for making a profit. It's always from someone proposing additional spending, justifying it by asserting that it saves money. The proof point is elusive.

And yes we can look at the auto industry where quality is much improved. But we can also see that in 1970, a VW Beetle sold for $1999. Inflation from 1970 to 2016 would have accounted for a 2016 price of $12,500 on that Beetle (look up the inflation calculator). But today, a VW Beetle Hatchback sticker is $21,600. No doubt some of that extra $9,100 comes from government mandated safety and emissions stuff, and some from additional features. But maybe some of that "free quality" improvement isn't really free.

So careful what you wish for. If we had a similar price increase in RVs, many of us would just get priced out of RV'ing.

 

[rhodies1]

I've heard comments like this for decades. But never from the people in the business responsible for making a profit. It's always from someone proposing additional spending, justifying it by asserting that it saves money. The proof point is elusive.

And yes we can look at the auto industry where quality is much improved. But we can also see that in 1970, a VW Beetle sold for $1999. Inflation from 1970 to 2016 would have accounted for a 2016 price of $12,500 on that Beetle (look up the inflation calculator). But today, a VW Beetle Hatchback sticker is $21,600. No doubt some of that extra $9,100 comes from government mandated safety and emissions stuff, and some from additional features. But maybe some of that "free quality" improvement isn't really free.

So careful what you wish for. If we had a similar price increase in RVs, many of us would just get priced out of RV'ing.

I agree with yours and others comments But look at how much RVS have risen in price in the same timeframe and we still do not have great quality control,I realize autos come off the assembly line with issues as well but when you read this from rum and others and see the same continued issues,then why isn't someone paying attention..Get a fix and improve your bottom line.

 

[SNOKING]

Another problem with these smaller companies trying to build a quality product is purchasing power. A Thor or Forest River can cut a much better deal on the components that make up a RV. Chris

 

[jayc]

What is interesting to me is the fact that the "better built" trailers that have gone out of business in recent years have nor been picked up by the mega-owners, Thor and Forest River. Teton, Nu Way (Hitchhiker), Peterson Industries (Excel) and now Evergreen are gone or doing only service with limited sales of other high-end brands. If the "quality control is the answer as suggested by Mr Gerber, why haven't these lines been scooped up as a prize? When Fleetwood went under, many of their brand names were taken by other manufacturers, including Heartland. Again, why none of the others?

 

[kowAlski631]

I agree with yours and others comments But look at how much RVS have risen in price in the same timeframe and we still do not have great quality control,I realize autos come off the assembly line with issues as well but when you read this from rum and others and see the same continued issues,then why isn't someone paying attention..Get a fix and improve your bottom line.

Factor number of units sold with number of complaints. People who are happy don't post or post when they're not camping.

 

[Bohemian]

If a manufacturer steps out of line with the industry they risk higher expenses and less profits. This in turn effects ability to finance and interest rate which can increase expenses and reduce profits.

If they can maintain an effective brand image which supports higher prices than the near equivalent competition then they can survive and even thrive with increased profits. If they can support an image of being far above the competition then they can support even greater profit margins, but on lower volumes.

The auto industry has supported increased quality by competing on quality. There are many groups that monitor and publish quality reviews. This produces consumer swareness and pushs the quality cycle. Much of thst quality is inexpensive because of the volumes sold. Expense of quality is amortised over many units and automated and precise operational structuring supports quality.

Also, employee motivation is always a key issue. Employees will act in accordance with compensation methods and work rules that are enforced. Paying by piece work and allowing employees to leave early when quotas are completed encourages speed over quality. Paying by hour encourages lack of speed. Compensating for quality need not cost more, but takes work rules tied to compensation. A fixed day with no early release combined with piede work pay could help. Annual bonuses based on reduction of warrenty costs could help.

Designs need to support manufacturing efficiency and quality. The prime concerns here are structural integrity and long term weather tightness. We should expect better on these parameters. Appliandes come and go over the long term and are out of the hands of manufacturers like Heartland. Frame integrity and reliability should be demanded by Heartland.

Prices will go up, but need not be excessive. It will take strong consumer interest, industry wide effort.

I don't see it happening, Mostly due to consumer lack of demand.
.

 

[brianlajoie]

I agree with yours and others comments But look at how much RVS have risen in price in the same timeframe and we still do not have great quality control,I realize autos come off the assembly line with issues as well but when you read this from rum and others and see the same continued issues,then why isn't someone paying attention..Get a fix and improve your bottom line.

I agree that the price of an RV has gone up dramatically, but don't you think that the price you pay the dealer is what is going up the fastest? When I looked at trailers, I learned quickly the the sticker price shown by the dealer detailing MSRP is very often higher than what HL suggests on this web site. If you think the manufacturers are not listening, why would a business model of paying more for less not continue? When I looked at the trailer I wanted, I found the exact model in 50 other locations. I calculated that my purchase price was 46% less than the sticker on the trailer. Some of that was the true MSRP, but much of it was the over inflated price the dealer was asking for. I ended up paying much less than the local rate. Do you think the dealers have heard this yet? Of coarse, but they count on the average buyer paying much more for convenience (or ignorance). This is the industry standard. Until the average buyer looks for higher quality at a fair price before they purchase, the business model has no reason to change. That is why it the business model hasn't changed yet.

 

[Mattman]

Interesting take. I never went to a factory tour, but watched them build these things on line. I can see why there would be problems. More units equal more money. I think there are some unreal expectations as to what a moving home on wheels quality should be. Well built quality = weight. Average consumer has a 1/2 ton truck and is probably towing more than they should. But hey, they saw it on TV. Truck towed the space shuttle. Most average customers spend what? 3-6 weeknds a year in there camper? If they raise the rate no one would buy them. It took me 2 years to pull the trigger. There's lots of other vacation options.
Full timing campers should have a higher standard IMO. Not sure how much that would drive the price up. But to me it seems campers are built just good enough. And like most things there are good ones and bad ones. Me personally I thought the North Trail was way better than Some of the others I looked at. Ex. Aerolite, Sunset, anything Forrest River. Less bells but seemed a little more stout. IMO

 

[Doublegranch]

I will agree on the quality of the North Trail....had a 21FBS for 5 years and "never" a problem after I switched out the Towmax tires. It was the perfect quality unit and never failed me....just a little small for me and the two "Aussie" girls for the number of Rally's we attend. I upgraded to the 2017 Sundance 3100CK fifth wheel....my first fifth wheel...Time will tell, but so far the Sundance is what I want and the girls have room to play. After bringing it back from Elkhart, the maiden Voyage for the Rally season will be Colo Sept....AZ Sept....Vegas Oct....I have discovered on the larger units, it pays to be "handy"....
RV's are not investments, but for me a means of enjoyment....it costs $$ for this pleasure and to have "my stuff" and the girls with me wherever I go....based against hotels, meals out and etc...I thoroughly enjoy the RV world and the Heartland Product!

 

[Sarge]

What is interesting to me is the fact that the "better built" trailers that have gone out of business in recent years have nor been picked up by the mega-owners, Thor and Forest River. Teton, Nu Way (Hitchhiker), Peterson Industries (Excel) and now Evergreen are gone or doing only service with limited sales of other high-end brands. If the "quality control is the answer as suggested by Mr Gerber, why haven't these lines been scooped up as a prize? When Fleetwood went under, many of their brand names were taken by other manufacturers, including Heartland. Again, why none of the others?

Simple. Why take on the liability of warranties and service if all you want are the assets / infastructure / location / etc...