The lasting effects of the COVID-19 pandemic are still being felt, even as more adults are vaccinated and various restrictions are disappearing. It’s clear that the automotive industry is struggling. Your local car dealer has to deal with a lack of available vehicles and soaring prices. Your local RV dealer, however, is thriving, at least for the moment as RV sales are on the rise.
What’s Going On With The Auto Industry?
When COVID hit, automotive producers slowed down production, fearing the demand for new vehicles would come to a halt. The market didn’t anticipate that the demand for cars would rapidly increase. Some city dwellers decided that owning a car would be safer than taking public transportation. Others moved into more open rural or suburban areas where owning a car is necessary.
While the demand for cars rose, the supply of semiconductor microchips couldn’t keep up. These chips are necessary for various vehicle systems, computers, cell phones, video game systems, and other items that were in demand during the pandemic.
The result was a major slowdown in the production of new vehicles, which led to pre-owned cars being sold faster than dealerships could replenish their inventories. Even with some improvements in the supply line, auto dealers still don’t have the inventory to meet current demands.
The Rise of the RV Dealer due to RV Sales
Recreational Vehicles (RVs) have always been a popular form of leisure. The pandemic took the love of RVing across the country to new levels. From vacationers looking for recreation to families needing a way to get away from their crowded neighborhoods, RVs offered a way to travel while remaining socially distant.
On top of those who already enjoyed getting behind the wheel of an RV, millennials started getting into the game. In 2019, only 14% of this generation claimed to consider stopping by an RV dealer to plan a vacation. After the pandemic hit, 73% of millennials claimed they would consider visiting an RV dealer at some point in the future.
The rise in interest in buying or renting an RV didn’t just increase in the millennial demographic. There was a 20% rise in interest in RVing due to the onset of COVID-19.
RV Dealers Aren’t Immune to Shortages
While nearly 80% of RVs are manufactured in Indiana, there are plenty of parts that come from other places, including overseas. COVID continues to cause some supply-line delays for various RV components like air conditioners to toilets.
There was an ample supply of RVs during the beginning of the pandemic, but the demand is starting to overtake supply, especially since new generations of vacationers are finding joy behind the wheel of an RV.
While the high demand and dwindling supply of RVs have caused prices to rise, there are expectations that production of necessary parts will pick up over the next year or so. There are still options for those looking to embark on the great American road trip, but finding a good deal from a local RV dealer will take a little more persistence and vigilance than before.
While the RV market hasn’t fallen too close to the automotive industry, the same principles of supply and demand are in effect. RV dealers may have made some serious sales at the beginning of the pandemic, but they’re starting to face the same issues car dealerships have been dealing with for the last couple of years.
With luck, both industries will return to a more balanced market. Until then, shoppers should just keep their eyes open and plan ahead.
