Rev Group reported RV shipments above expectations in the company’s fiscal first quarter, helped in part by Mercedes-Benz Sprinter Type B motorhomes’ availability.
Interim President and CEO Mark Skonieczny said Mercedes pushed a software update to the manufacturer during the fiscal first quarter. The software update corrected a parking brake flaw that required recalling more than 120,000 Sprinter vans in 2022.
Skonieczny said the update came two months ahead of expectations and enabled its Rev Recreation Group division to increase Type B shipments during the quarter. He said the increase brought in about $40 million in revenue the manufacturer previously expected to sell in the second quarter after the recall fix was made.
“As a result, we expect second quarter revenues to be approximately in line with the first quarter,” Skonieczny said, “as we complete the shipment of recall units and continued normal production activities across the businesses.”
The Rev Recreation Group segment increased sales 12% in the fiscal first quarter of 2023 from the first fiscal quarter of 2022 and lowered its backlog by 23% year-over-year.
“Class B and Class C orders have normalized pre-Covid levels and backlogs for these businesses remain at approximately 10 to 11 months of production,” Skonieczny said. “We did receive model year 2023 cancellations of Class A and towable units. Our backlog has remained over one year for the towables businesses. We believe that a portion of these cancellations will be replaced with upcoming model year orders as dealers evaluate inventory levels during the spring selling season.”
Skonieczny said the manufacturer expects the RV backlog to decline as the fiscal year continues and stabilize at four to six months’ production by the end of the fiscal year.
He said the company continues to see strong sales conversations in Type B and Type C motorhomes, even as demand for Type A motorhomes has fallen. Rev Recreation Group continues to have dealers on allocation for its high-end Type C motorhomes.
“We still see strong demand in that market,” Skonieczny said. “I have been able to participate in a couple of the dealer shows and I think traffic has generally been in line or up, but deal conversions have been more of a challenge. So we are still seeing the strength in our numbers here in the higher-margin products that we sell.”
Skonieczny said dealers are continuing to ask for more Type C motorhomes and inventory levels have not yet reached pre-pandemic levels.
“The dealers are going to put on their lots what sell,” he said, “and what we have talked about before is, when you look at some of the products we have, if your units are being accepted by the market, they are going to put on units that actually turn. We look at some of our products, they have quicker turn rates than what we are seeing in the competition. So those are some of the things that we are selling the dealers on, and they see it.”
