To read this and other articles from the March issue of RV PRO, visit http://read.uberflip.com/i/788754-march-17.
Nowhere in the RV industry has there been more jostling for market share leadership over the past five years than in the Class B segment.
For 25 consecutive years, Kitchener, Ontario-based Roadtrek dominated the Class B business. As recently as April 2011, Roadtrek owned 50.8 percent of the U.S. market with fellow Canadian builder Pleasure-Way Industries a distant second at 26.2 percent. U.S.-based builders lagged well back.
But 2011 also was the year Winnebago Industries, with its vast distribution chain, entered the Class B market and the market began a seismic change, as Baby Boomers downsized from larger RVs.
In April 2015, Winnebago reported a 30.6 percent Class B market share and in so doing wrestled B leadership away from Roadtrek and held onto it, ending that year with a 33.9 percent share. Winnebago matched that same percentage through last November.
The Erwin Hymer Group North America (EHGNA), the new owner of Roadtrek, is making a concerted effort to regain the lead, as Thor Industries stands a solid third and Pleasure-Way holds onto fourth.
See more photos in slideshow at bottom of story.
Perhaps not coincidentally, since Winnebago entered the market in 2011, retail sales for Class B’s have doubled (see Figure 2 on page 16). Year-end figures for 2016 weren’t available when this issue of RV PRO went to press, but through November, retailers for the nine active builders of Class B’s reported 3,224 retail sales, compared with 1,770 in all of 2012. Even without the final numbers in, Statistical Surveys says 2016 ended up being the best year for Class B sales since the firm began reporting B sales in 2007.
The RV Industry Association’s shipment figures for 2016 show similar explosive growth. Manufacturers shipped 4,087 Class B units in 2016, an increase of 24.1 percent over 2015 – second only to the percentage of growth in Class C units.
Although Stat Surveys doesn’t do forecasting, Richard Curtin of the University of Michigan does, and is projecting Class B wholesale shipments this year will reach 4,400. That would be a modern-era record. (The all-time high water mark of 7,100 was set in 1984.)
Innovative Ideas at Hymer Group
Despite the stiff competition from “south of the border,” Jim Hammill, president and CEO of the Erwin Hymer Group North America, has an invigorating outlook for the company’s future. EHGNA’s $75 million investment in new product development at its facility in Kitchener, Ontario, is paying off handsomely for the traditional Roadtrek Class B brand, the new, European-inspired Hymer models and an entirely new brand, the Sunlight.
“I can say without a doubt that the shows at Hershey, Pomona, Louisville, and Tampa have been the best in our history. This is not an exaggeration at all. There is a level of excitement that’s hard to measure,” Hammill says.
Sales at these events have been double or even triple past years, leading Hammill to forecast that the RV maker will build and ship around 3,500 vehicles this calendar year. That total would exceed the entire industry’s output for every year in the modern era until 2016.
The excitement at the company resolves around the Hymer brand products, such as the Sonne, the Aktiv and Aktiv 2.0, the new Roadtrek Simplicity SRT and the new Sunlight brand.
The platform for many of these new models is the Ram ProMaster, which has become the chassis of choice for some 60 percent of all EHG vehicles, up from 30 percent just a few years ago, Hammill says.
For example, the entry-level Roadtrek Simplicity is built on a Ram ProMaster 2500 chassis. The model has all the features of more expensive models and “massive” storage under the rear fixed bed, yet MSRPs start at $70,000.
“This is $10,000 to $12,000 less than we would be selling this unit for just two years ago,” says Hammill. The price point makes it possible “for anybody to buy a motorhome.”
One of the new Hymer models gaining a lot of retail attention is the Sonne (pronounced SEW’-nay and means sun in German), another coach built on the 2500 ProMaster chassis, but this model specially targets the female traveler.
“About 30 percent of our business goes to single people and the majority of them are women,” says Hammill.
The Sonne features the largest bathroom available in a Class B that includes a stand-alone shower. Finished in a light butter cream interior color, it also features a kitchen galley and permanent queen-size bed.
The shower stall rises out of the galley and provides more space than any other Hymer model.
Hammill praises the tight turning radius on the 2500 ProMaster chassis (the shortest length among any ProMaster), which makes it an attractive first vehicle for many consumers.
MSRPs on the Sonne start at $87,000.
Another new Hymer model is the Aktiv 2.0, which is an extended version of the popular Aktiv model. RV PRO accorded the Aktiv “Best of Show” honors at the National RV Trade Show in Louisville and it’s lived up to the recognition, with both Aktiv versions outselling traditional Roadtrek models at the Tampa Show in January, Hammill says.
Unlike many U.S. Class B’s, both Aktiv models place the dining area immediately behind the driver’s seat. Both front seats swivel around to face a dinette and two additional seats. The rear platform of the Aktiv contains a queen-size bed (king size in the Aktiv 2.0) that folds up, opening the aisle way, which allows for storage of large items such as bikes, skis and even kayaks. They also include dual-pane windows and a skylight ventilation system that is standard in European models.
The Aktiv models have no black holding tank. Instead, the models are equipped with a removable 6-gallon cassette toilet that can be rolled like a suitcase to the nearest toilet to be emptied.
“People (dealers) were worried about that at the outset. Now they think it’s a great thing,” Hammill says.
“The Aktiv has not been copied by anyone in North America,” Hammill says, “so people are crowding our booths to see it.”
MSRPs on the Aktiv are $91,000 and for the Aktiv 2.0 it is $98,500, with basic models starting at $80,000.
Hammill’s prediction of 3,500 builds this year for EHGNA would dwarf the rest of the industry in most years, if not for the presence of industry leader Winnebago, with Thor lurking in the No. 3 spot. But Hammill, who remembers not too long ago when Roadtrek dominated the North American market, says market expansion share is secondary.
“My world is not market share. I’m in business to make money. I never worried about market share or panicked,” he says.
That being said, EHGNA has never fallen below No. 2 in the North American market and, in fact, was No. 1 in Stat Surveys sales for November.
“I’m worried about growing our brands, making sure our dealers have enough product to sell, that we’re not encroaching on our dealers’ territories and that Class B’s are well-known. When the whole segment grows, we grow. I don’t think Winnebago or Thor are quaking in their boots by little Roadtrek.”
Maybe, maybe not.
Flush with all these new models and brands, the company’s dealer body has grown considerably the past year.
EHG has signed on 77 additional dealers to carry Hymer brand products and the 124 Camping World dealers to exclusively carry the new entry-level Sunlight brand.
“None of these products are clones; they are all designed separately,” Hammill says.
Built on a Dodge ProMaster chassis, the Sunlight features a mid-coach, twin bed floorplan and a rear bath. MSRPs start at $69,900. The company was turning out 10 Sunlights a day to meet demand, Hammill says.
Roadtrek dealers also will have an opportunity to carry another model, the entry-level Carado, which is debuting later this year.
All this growth is possible through the affiliation with Erwin Hymer Group (EHG) in Germany, the world’s largest producer of motorhomes.
EHG’s factories in Europe will build some 35,000 to 38,000 motorhomes in 2017, “bigger than any two or three of North America’s largest added together,” Hammill says. EHG’s approach to the industry differs greatly from that of Industrial Opportunity Partners (IOP), which owned Roadtrek from 2011 to 2015.
“IOP was a private equity firm that wanted to maximize its investment and had an exit philosophy after four to seven years. Erwin Hymer Group is family-owned and in it for life. They want to take the incredibly well-engineered styling of European products and integrate them with the production we do here as well as bring over new products and features never seen in North America. It’s Roadtrek technology added to European technology,” hence the EHGNA slogan: “German Engineering, European Design, North America Built. It’s the best of three worlds.”
The company will upgrade all existing models for 2018, Hammill says, which, reading between the lines, suggests there won’t be any new brands for next year.
“Customers need a chance to see them,” Hammill says. “It takes one-and-a-half to sometimes two years for a new model to settle in. Consumers can’t see an Aktiv 2.0 anywhere right now…they’re selling off the lot so quickly. The same will happen with Sunlight.”
Meanwhile, Hammill reports that EHGNA’s new 255,000-square-foot facility in Kitchener will be in full production by the end of March, turning out motorhomes and the company’s new travel trailers.
Pleasure-Way Marks 30th Anniversary in 2016
Family-owned Pleasure-Way Industries has been manufacturing in the Class B market for more than 30 years from its tidy facilities in Saskatoon, Saskatchewan, Canada. In 2016, Pleasure-Way experienced the largest percentage increase in retail sales and the second largest increase in market share among the four leading manufacturers, while earning RVDA’s DSI award, one of just five motorized OEMs to do so. It was Pleasure-Way’s seventh consecutive year to bring home the prestigious honor.
“It speaks to the quality of our product,” says President Dean Rumpel, whose father Merv started building Pleasure-Way motorhomes in 1986 in the back shop of Glenwood Trailer Sales. “When customers don’t have issues, dealers don’t have issues. Everybody is happy. It also speaks to our relationship with dealers and our willingness to help them be successful.”
That being said, change for Rumpel and his 150 employees tends to be methodical and slow by industry standards (more on that later). Rumpel made slight upgrades to his six models for 2017. The major ones are the addition of a 2,000-watt Xantrex pure sine wave inverter (which allows campers to run a microwave on the house battery without turning on a generator when dry camping), rear and side roll-up window screens and expanded solar panel capacity.
The latter is especially intriguing, as Pleasure-Way upped the number of optional 95-watt panels from three to five on its wide-bodies, making the 12-volt side of the coach almost self-sustaining. Solar is one of the few options on Pleasure-Way motorhomes but virtually every one built now is equipped with solar, says Rumpel, who began “dabbling” in solar panels in 2015 and made the full commitment last year.
Pleasure-Way also added some optional features such as new fabric colors, new Corian countertop colors and select hardwood cabinetry colors. Floorplans remain intact from the previous year.
In all, Pleasure-Way builds five of its six models (the Ascent and the Plateau FL, TS, XLMB and XLTD) on the Mercedes-Benz Sprinter chassis, which it first adopted in 2004, after long stints with the Dodge Ram and then Ford Econoline chassis. The other Pleasure-Way model, the Lexor TS, is built on the Dodge ProMaster, which it adopted two years ago.
MSRPs range from the $106,000 on the Lexor TS to $140,000 on the wide body Plateau XLMB, which features a queen-sized (60-inch-by-74-inch) Murphy bed that neatly folds up into the living room wall, creating a large living and dining space.
“The demand for product the past two years has outpaced our ability to produce,” says Rumpel. “All models are selling equally and so are equally produced.”
In this era of the push for high volumes, Rumpel takes pride in the Pleasure-Way business model, which rejects the traditional production line manufacturing process and puts quality first. Pleasure-Way uses the “stall” process whereby each vehicle is built in one of 15 stalls, where units are built like houses, from the outside in. The cabinet installers serve as the linchpin of the process and undergo a three-month training period before they join the production process and are assigned to a stall to build a specific model. This contrasts with highvolume assembly line process used virtually everywhere in the industry, where new hires begin production work immediately and turnover is rampant.
The average Pleasure-Way coach takes 400 worker-hours to build. Output is three units a day.
One benefit to the stall process is that quality is high and Pleasure-Way touts one of the lowest warranty claim rates in the industry. On the downside, upping production volume is a time-consuming process that takes months to put into place. For that reason, Rumpel has instituted just two production increases in the past 18 months, despite an order backlog that ranges between 200 and 300 units.
When asked to put Pleasure-Way’s milestone 30th anniversary into perspective, Rumpel points to the fact that the company is one of the few major RV manufacturers not located in Indiana and is one of just a handful of family-owned OEMs remaining in the RV industry.
“This is something we look at with pride,” he says. “We survived the downturn in 2008. We feel proud of our history and do a great job. We specialize in small motorhomes. We know what we do, we do it well and that is what we will stick to.”
Pleasure-Way’s 85,000 square feet of production space under five roofs might be the cleanest, most uncluttered in the industry.
“At the end of the day, everybody takes 10 minutes and they clean, sweep and move garbage so we can start fresh the next day,” he says.
Midwest Automotive Designs: The Luxury, Custom Class B Builder
Elkhart-based Midwest Automotive Designs Corp. first made its mark over a decade ago with its business class of limousines, now a staple in the industry. Founder Tim Gray and partner Jason Sullivan, vice president of operations, took the same design mentality into the Class B market in 2013 with the Weekender.
The Weekender, built on the 24½-foot Sprinter 3500 chassis and equipped with a 6-cylinder diesel engine, had a full shower with marine toilet and a kitchenette. Key features included handrubbed wood finishes, custom-built furniture, king-size beds, multiplex electronic control systems and quality fit and finish. Base MSRP was $135,000.
Their goal was to build one a week.
Gray and Sullivan then stepped back and re-examained the Class B market.
“We realized that many people buy RVs, but are not using them as RVs but more as destination vehicles to get from Point A to B in comfort and luxury,” Sullivan says. “We realized that a lot of people just wanted (in their Class B) a bathroom and a place to sleep. They weren’t using their shower or their generator.
“We went back to the shop and came out early in 2014 with the Daycruiser, on a Sprinter 2500 chassis with a fold-down bed and some of the Weekender amenities with the toilet in the rear and minus a shower.”
Base MSRPs were $125,000.
“We made our customers scratch their heads and ask themselves, ‘Do I really need a generator and shower?’” Sullivan says.
“It took six to nine months for anybody to pay attention to it. No one could get their head around it,” Sullivan says, somewhat chagrinned. “It was something new. No one had seen a modern van conversion with just a toilet. Just a few dealers took the initial product. Granted, the Daycruiser is not for everyone, but it is for folks who never intended to use a shower or generator. That’s one reason for the B vans’ recent success: Customers using the product not only as an RV.”
“Our buyers tend to be people who had a large Class A, but are looking for the same amenities in a Class B,” says Sullivan, who joined Midwest five years ago.
Midwest has some interesting options on its Weekender, including power window shades, deluxe seat massage, wood leather steering wheel, cradle point wireless Internet router for Verizon or ATT, Apple TV, satellite radio and a 12-volt Pro Air 60,000 BTU Heat and AC.
“A lot of our dealers like the Pro Air option,” he says, so much so that 85 percent of all units go out the door so equipped.
Sullivan tested the effectiveness of the furnace in combination with the Mercedes-Benz high-idle feature at a recent retail show. All Weekenders feature a X07 high-idle parametric special module, which is adjustable by the driver. He ran the engine through the night at 1,400 RPMs to power the furnace on the house battery. From a noise standpoint, this process was quieter than a standard generator.
“If I thought the market would swallow the pill, I would make the 60,000 BTU furnace standard and drop the LP tanks altogether,” he says.
Meanwhile, at last year’s Hershey Show and Open House, Midwest unveiled a Daycruiser on a Dodge ProMaster chassis and planned to launch this spring a Weekender on a 144-inch Sprinter chassis.
Sullivan says production of the Weekender and Daycruiser is running “neck and neck.”
From the outset, Midwest has been somewhat vertically integrated in that it owns its own seating company, wood processing facility and in-house electronics integration department.
Sullivan says Midwest seeks to be known as a high-end manufacturer. This integration allows Midwest to customize vehicles beyond what other manufacturers can. A review of retail prices shows the models cover a wide price range. Base prices run from $99,900 for the ProMaster model to $129,900 on the Daycruiser and $139,900 on the Weekender.
Sales are proving Gray and Sullivan are correct. The Weekender and Daycruiser have propelled Midwest’s B sales to over $40 million and a No. 6 ranking in the latest Stat Surveys report.
Midwest now has a dealer body that numbers near 30, but has yet to penetrate many of the nation’s major markets. That’s OK, says Sullivan.
“We are a builder that gives a greater piece of real estate to our dealers,” he says. “We are blessed and very fortunate for being in the RV market for such a short time but have such a strong dealer body and sales staff.”
Sullivan concedes that the Weekender and Daycruiser are not for every RV dealer, especially those who stress price over value. “This makes sense to some, but not to a lot of salesmen.” But, he quickly adds, “They’re missing the point.”
When RV PRO spoke with Sullivan in late January, Midwest was busy giving its models a facelift for model change in April before planning to focus on new product development. Sullivan says that by the end of this year, Midwest hopes to launch a new model on a Ford Transit chassis.
“I hear consumers are ready for more Ford B vans because of the availability of repair opportunities” across the country, Sullivan adds.
“We’ve grown quietly,” says Sullivan. “We’re right where we want to be. We’ve grown at a rate that’s a bit above goals we set for ourselves, so we’re setting higher goals this year.”
Midwest does have room to grow with additional production capacity available at its two production sites, covering 80,000 and 30,000 square feet, located two blocks apart on Elkhart’s east side.
