Lippert Component’s RV OEM sales in North America dropped 13% during the third quarter compared with 2021. President and CEO Jason Lippert said the company anticipated the decrease in wholesale shipments and he remains confident consumers’ desire to be outdoors is not changing.
RV OEMs have adjusted production schedules to better align with slowing demand and dealer inventories, he said, and the company expects the trend to continue for the next few months.
The industry was manufacturing at a rate of around 350,000 annual RVs during the third quarter, but the company forecasts the level to rise to a 400,000 pace next year, he said.
“We can still scale the business in a real healthy way to produce really great results at 400,000 units,” he said. “We expect next year to be a lot calmer with respect to how production flows quarter-to-quarter.”
Chief Financial Officer Brian Hall said the company expects net sales to decline 20-25% during the fourth quarter, compared with 2021, as softening demand in the RV market and a resulting RV production decrease occur.
“Our investments in innovation, our facilities and our teams have, and will continue to drive, our long-term vision,” Hall said. “We remain confident in our ability to further drive value and expand content in the quarters to come.”
Lippert Components employs 150 team members focused on research and development. The company has released 50 new products into the RV aftermarket during 2022.
Jason Lippert said a large part of Lippert’s growth is taking existing products and building a next-generation version with improved features. He said the company’s anti-lock brake system, a longtime auto feature, will resonate with RVers.
“We anticipate that in the next five years, most total RVs will have ABS brakes,” Jason Lippert said, “resulting in one of the most transformative products we have launched in years. Products and improvements like these can translate to hundreds and dollars of content per vehicle.”
Other 2022 product releases he cited included independent suspension axles, pop-top sleeping systems, skylights and auto-lock entry doors.
Content per total RV increased 54% during the third quarter and Hall said most of its input costs are chassis related, because the chassis uses steel and aluminum. The company forecasts steel and aluminum prices will fall during the next few quarters.
“(The chassis has) a lot of steel and a lot of where our indexed pricing resides,” he said, adding slide outs and leveling products add to Lippert’s steel use. “You will have a lot of our doors, a lot of our windows, awnings … things of that nature that contain a lot of aluminum. Those types of items might be half of our content.”
