Winnebago Industries Inc. President and CEO Michael Happe said the manufacturer had a “really good” Elkhart Extravaganza. Winnebago did not offer dealers “steep discounts” to incentivize orders.
Winnebago’s return to a traditional in-person Elkhart Extravaganza brought great and honest discussions with dealers, Happe said.
“Any time you have a chance to spend quality time with one of your customers,” he said, “you get the chance to share perspectives and talk about the future in a productive manner.”
Happe said dealer inventory levels led to the decision not to offer traditional Elkhart Extravaganza pricing to dealers.
“We stated very clearly that we were not showing up in Elkhart that week to offer steep discounts in order to incentivize dealers to take product that—in some cases—they should not take,” he said. “Especially on the towable side, inventory in the field continues to be at a healthy level. While we would love to collect record-breaking levels of orders at an event like Open House, this was not the year to do that, particularly on the towable side.”
Happe said Winnebago collected a “solid amount” of orders during the event.
Dealers told Winnebago they are not operating at peak margins but Happe said they are relatively normal historically.
“I think dealers are financially healthy right now,” he said. “They would like to run their business at slightly higher turns. We are fine with both those. We want the dealers to be in great position when the winds kind of return behind our sales in the future.”
Winnebago conducted discussions during the fiscal fourth quarter, when the manufacturer raised its overall RV market share to a record 12.8%.
“We are gaining share,” Happe said. “We had a different level of share in 2019. I think we finished with 9.5% points of share in the RV space at the end of fiscal ’19. We enter fiscal ’23 with almost 13 points of share.”
Happe addressed the market downturn, saying the industry’s headwinds are a concern.
“We will operate our businesses with the paranoia that headwinds could last for a little while, but we will certainly hope they do not last very long,” Happe said. “Every slight downturn in a cyclical industry has its own dynamics. This one is different than 2018 and 2019.”
Inventory levels, particularly on the motorized side, are healthier, he said. Some motorized segments still need to reach optimal inventory turnover levels, he said.
“We believe that towable margins will maintain an industry-leading position and that you will likely see them stabilize at historically normal levels as we travel through the rest of fiscal ’23,” Happe said. “That will be a gradual development, but we have confidence that that will happen.”
Being responsible in producing and maintaining appropriate inventory remains a Winnebago priority, Happe said.
“As market conditions have recently downshifted, we have exercised further rigor and a focus on sustainable long-term value by constantly adjusting production in certain business segments to calibrate to the needs of our dealers,” he said. “While we anticipate some select supply-chain constraints will linger into fiscal 2023, particularly in the motorhome and marine segments, we continue to make progress and become more effective at minimizing the related impacts.”
