State is left behind as business gains speed across U.S.


July 10, 1992|By Mensah Dean | Mensah Dean,Staff Writer

Recreational vehicle dealers in Maryland still are plagued by slow sales, even as the nationwide industry rebounds -- a trend that may reflect the economic uncertainty gripping state residents.

"We might as well close our doors this week," David Martin, sales manager of Metro Campers Paradise Inc. in Finksburg, said recently. Sales are so slow that Metro has cut its four-man sales force to two this year, he said.

Nationally, the industry is recovering, said Bill Baker, spokesman for the Recreational Vehicle Industry Association. Sales and shipments of the vehicles, which cost as much as $85,000, show healthy increases.

As of April, national sales of RVs -- which include everything from 35-foot motor homes to towable campers -- were 20 percent higher than in the same period of 1991. Shipments of towable RVs had risen by 33 percent, and motor home shipments were up 27 percent.

But in Maryland, shipments and sales plummeted. First-quarter sales, for example, fell 32.2 percent compared with the 1991 period, according to Michigan-based Statistical Survey Inc.

Of the decline in shipments, analyst John Hilton of Argus Research Corp. said many dealers probably had built up inventories over the last few years, which often happens during recessions, leaving no need to order more vehicles.

The disparity between the national and state trends has left area dealers groping for an explanation.

"We don't know why; we're dumbfounded," said Herb Schwartz, owner of Happy Travelers in Gambrills.

Greg Merkel, general manager of Leo's Vacation Center in Gambrills, believes sales in Maryland are behind the national pace because the state was hit by the recession later than other parts of the country. He is pinning his hopes for sales growth on next year.

Like many of his colleagues, Mr. Martin of Metro Campers Paradise thought 1992 was going to be a good year because interest rates are lower than they have been in years. But this spring, traditionally the best season for RV sales, business was slow.

According to Dr. Michael Conte, University of Baltimore economics and finance professor, one likely reason is that the recession has hit the state's middle- to upper-income residents employed in defense, technical and other professional industries, harder than their peers in other states.

Since these are the people who tend to buy expensive RVs, it stands to reason that sales in the state have gone down, Dr. Conte said.

Whatever the reasons, they are resulting in slow sales, dealers say.

"People are coming in, but they won't part with their money," Mr. Martin said. "Primarily, people are afraid to make a capital expenditure. Basically, it comes down to the economy of the country and the way it's run."

And when people do buy, they tend to favor towable RVs over more-expensive motor homes. Prices for towable RVs, which include travel trailers, folding camping trailers and truck campers, range from $10,000 to $20,000. Motor-home prices run from $30,000 to $85,000.

But until the pace of sales improves, Maryland's RV dealers must get used to sparsely populated lots.

As Mr. Martin said, gesturing toward his lot, "Normally [at this time of year] there are so many people on the lot that it's not funny. But this is ridiculous."

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