On the Road, Again

By Alexander L. Taylor III

Americans are moving back into motor homes

Like their pioneer ancestors who traveled west in covered wagons, American vacationers hitting the roads this summer will take their beds with them. From Maine's Acadia National Park to Zion National Park in Utah and beyond, 7 million recreational vehicles will be on the road. They range from small folding trailers that barely accommodate four people and cost about $2,500 to sumptuous 30-ft. motor coaches that comfortably sleep six or more and are laden with microwave ovens, walnut paneling and air conditioners, all for a neat $87,000.

RVs are going into overdrive once again after hitting a rough patch. Sales reached 526,300 in 1978, but then were stalled by rising interest rates and fears of a gasoline shortage. Only 181,400 were sold in 1980, and half the manufacturers and dealers folded. But last year sales were back to 360,000.

Despite generally poor weather this spring, sales rose 25.3% during the first three months of 1984, and March was the best month in nearly six years. Executives say that business is getting a lift from baby boomers who now have children of their own and want an inexpensive means of travel. They tout a University of Michigan study indicating that 40% of households surveyed plan to buy or use a recreational vehicle over the next three years.

The fastest-growing segment of the market is motor homes, whose prices start at about $19,000 for a stripped-down version with four bunks. "They're a condo on wheels for about what you'd pay for a Cadillac," says James Summers, head of the RV dealers' association. "That's a powerful selling point."

Though they still cannot be considered economy vehicles, new motor homes are more fuel efficient than earlier models. Riverside, Calif.-based Fleetwood, the industry leader with 20% of the market, cut excess weight and restyled exteriors to make its RVs more aerodynamic and squeeze more miles out of a gallon of fuel. The company's 27-footers now get 15 m.p.g. on the highway at 50 m.p.h., twice the mileage of a decade ago. Winnebago (1983 sales: $239 million) developed a front-wheel-drive model powered by a Renault diesel engine. One version, called the LeSharo, gets up to 24 m.p.g., even though it carries a fully equipped bathroom and two double beds. List price: $25,000.

The industry resurgence has meant a boom for the town of Elkhart, Ind. (pop. 41,300). A carriage-building center at the turn of the century, northern Indiana was later home to such automakers as Studebaker and Auburn. Today the defunct car companies have been supplanted by more than 30 camper, trailer and motor-home makers, who accounted for 37% of last year's U.S. production. In the past year, they have hired 4,000 new workers.

At Coachmen Industries, the Elkhart area's largest manufacturer, sales shot up 80% last year to $478 million, and profits nearly quadrupled. During the first three months of 1984 profits leaped another 89%, even though production was restricted by a shortage of chassis on which motor-home bodies are mounted. Complains Chairman Thomas Corson: "Detroit can't send us enough, so we're starting to use Toyota chassis."

Having seen what they consider the worst during the oil crises of the '70s, industry executives now view open roads ahead. Says Fleetwood Vice President Elden Smith: "Not only is there more leisure time, but people seem willing to work at enjoying it more. The number of dollars spent on leisure could end up being second only to the defense budget."

-- By Alexander L. Taylor III.

Reported by Lee Griggs/Elkhart

With reporting by Lee Griggs