About two months after we discussed recreational vehicles are "on pace for a blowout year" and "sales just hit an all-time high," we got the latest confirmation from Thor Industries CEO Bob Martin. He spoke with Jim Cramer on "Mad Money" earlier this week about the manufacturer's massive order backlog.
Thor Industries — Airstream, Heartland RV, Jayco, Livin Lite RV, and others — first began to experience an uptick in sales after lockdowns ended in May and June 2020. Without a vaccine, people were too afraid to fly or stay in hotels or resorts, so they bought campers and traveled. The RV industry also saw a lot of first-time buyers, especially with the millennial generation.
The RV boom has left many dealers with limited inventory or even empty lots. Thor's backlog of orders is a whopping $14.32 billion as of late April, the company's latest filing said. That's up 32.5% from $10.81 billion at the end of January and up 550% from a year ago.
Martin told Cramer in an interview on Tuesday evening that the company is "pretty much sold out for the next year" with new RV inventory already headed to customers instead of sitting on dealers' lots.
"We have backlogs that are full of retail orders, so those will hit the dealer's lot and then leave, and so we're still not able to build inventory at our dealer's lots," he said.
Without the ability to build inventory at dealer lots, one would suspect an RV shortage for Thor brands is developing.
The virus pandemic rewired people's brains as they became more in touch with the outdoors and explored small towns and parks rather than big cities and resorts.
"Right now, we see this as a long-term trend, and if we get people in at an entry-level price and entry-level product, they grow throughout their lifetime," he said. "People trade every 3 to 5 years, but right now we're seeing it a little bit quicker, and we see this for a long runway."
At the moment, the company's North American supplies are quickly dwindling to about 75,000 RVs last quarter, down from 106,000 in 2020, and well below 132,500 in 2019.
This seems like an RV shortage is in the making, which suggests that used RV prices should increase in price.