RVBusiness, September/October 2018

Update on the Canadian RV Industry The introduction of U S tariffs on Canadian steel and aluminum is cause for considerable concern and the impact of these tariffs on the RV industry has been a top priority for the RVDA of Canada this past spring and summer RVBUSINESS GUESTVIEW A s we pass the halfway point of 2018 we are pleased to see that the Canadian RV industry is holding steady Retail new unit sales are seeing an increase of about 3 and retail RV revenues have also increased over the same period last year at a rate of growth of 37 Growth has been the strongest in the Class A and Class B motorized markets Class Cs for their part are on par with the year prior which drops the motorized average down but the Class C market can be greatly affected by the rental industry and the purchasing cycle of rental units On the towables side travel trailers are showing the strongest gain coming in at about 5 growth Barring any unforeseen circumstances we anticipate that this trend will persist for the remainder of the year Here then are a few things to keep an eye on Dealer inventory levels are still quite high Many dealers may have anticipated a stronger selling season given that 2017 saw more than a 14 increase in new unit sales There is still a considerable amount of inventory on the lots so restocking levels may not be as high this fall as they were last year Given potential price increases from the OEMs and the current foreign exchange market the business reality for dealers is that they may have to choose to bring in less inventory this upcoming year and will likely only order what they need As mentioned foreign exchange rates and the strength of the Canadian dollar are always at play for our Canadian dealers However until the Canada U S trade negotiations are resolved the Canadian dollar will likely remain in the range of 125 to 135 for the remainder of the year and possibly into the first half of 2019 Of course should a trade deal be reached between Ottawa and Washington D C our hope is that the Canadian dollar will gain some additional strength A considerable risk for our dealer body is when the dollar fluctuates dramatically in one direction or the other making it difficult for dealers to react to the price fluctuations in a short period of time When the Canadian dollar rises quickly it makes purchasing new inventory attractive however that will make it more difficult for dealers to sell older inventory at higher prices Flipside when the dollar drops quickly older inventory becomes more attractive for consumers but dealer cost increases for additional inventory This creates sticker shock which can deter consumer purchasing for many retail markets One of our most significant concerns remains the uncertainty over the outlook for the North American Free Trade Agreement NAFTA which of course has come to include the U S steel and aluminum tariffs as well as numerous counter measures by the Canadian government The introduction of U S tariffs on Canadian steel and aluminum is cause for considerable concern and the impact of these tariffs on the RV industry has been a top priority for the RVDA of Canada this past spring and summer Our government relations initiatives including our pre budget submission have asked the government of Canada to prioritize a renewed NAFTA which recognizes the success of an integrated North American economy The RV Eleonore Hamm is president of the RV Dealers Association RVDA of Canada a national federation which exists to protect and promote the interests and welfare of RV dealers across Canada in order to enable the industry to maximize its potential She has been with the association since 1995 and stepped into the associations leadership role in 2003 38 RVBusiness S E P T E M B E R O C T O B E R 2 0 1 8 BY ELEONORE HAMM industry has benefitted tremendously from the integrated North American market that NAFTA has created The free flow of goods and services across the border has helped our industry grow significantly over the years Increasing the cost of materials from Canada like steel and aluminum will only increase manufacturing costs This will hurt businesses and consumers on both sides of the border We have been consistent in our support for the governments multipartisan whole of government approach to preserving North American free trade as well as highlighting how our industry has thrived in an integrated North American market This is apparent through our findings in our most recent economic impact analysis of the Canadian RV industry RV ownership has grown in Canada Based on our studys findings it is estimated that 15 of Canadian households own an RV compared to 14 in 2011 With the increase in the size of the population this translates to a 13 growth in the number of RV owners Furthermore our study has found that the Canadian RV sector stimulates economic activity and creates jobs for Canadians across the country Across all four subsectors total RV industry expenditures for 2017 have been estimated at approximately 61 billion Not surprisingly RVing not only continues to be an exceptional way to travel but it also has a considerable impact on the Canadian economy Successful trade negotiations and positive agreements will ensure the continued success of our industry North America wide RVB