Are budget RVs really possible?

[beancounterman]

Where is the filet mignon for $1 a pound? We all want it, so why can't we have
it?

I'm sorry, but the real answer to this question is not what we are looking for.
The lessons
of the M380 vs. the old LXi should be taken to heart.

The equation is simple: cost (parts and labor) + overhead + profit = wholesale
cost. Add
the dealer's markup and you get the retail price. You can see on the SEC website
that the
profit margins for public RV companies are quite narrow, and even negative from
time to
time. Dealer margins are typically in the five to ten percent range. So the
problem is not
excessive profit margins.

So the question is: where do you find the savings to lower the price? Assuming
efficient
operations at both the manufacturering and dealer levels (I would argue that
competition
insures that most successful businesses are efficient, and punishes and
ultimately
eliminates the inefficient), the costs of parts or labor must be reduced.
Ultimately,
reducing the price leads to compromises that lower "quality."

An RV is a tough product from a manufacturing standpoint because we demand of a
lot of
content. You know the story--a motorhome is a house that also goes down the road
at 70
m.p.h. In addition, production volumes are low, relative, for example, to the
auto industry.
So the economies of scale are not there, especially in the higher end of the
market. An RV
manuafacter cannot build 50 prototypes of the 2007 model and test them for
100,000
miles each.

The sad news is that, as much as we would love to be able to buy a top quality
new motor
home for $100,000, that kind of a budget is going to result in an RV that is
compromised
in a thousand ways to get to the target price. Think $60,000 mobile home on an
inexpensive (crude) but high GVWR truck chassis.

Or looking at the issue from a different direction, if it was possible to build
the $100,000
unit as the high quality unit we are asking for, someone would already be doing
it very
successfully.

Sometimes we need to recognize that the difficulties of resolving champagne
tastes on
beer budgets.

--- In WanderlodgeForum@yahoogroups.com, randydupree wrote:
> i don't know if you guys remember this,but BB converted a mci 45' bus shell
some 10
years ago.they could not build a 45' BB because of the weight.story was that mci
was for
sale and BB was the buyer.so they were going to use the mci shell for the 45'
wanderlodges.the deal fell through for some reason,so only one coach was ever
built.now,volvo owns prevost,volvo owns BB,why would volvo allow BB to build bus
shells
for conversion?when they already have the best shell in the market?i know what i
would
do! randydupree93wb
> ----- Original Message -----
> From: Jim Owens
> To: WanderlodgeForum@yahoogroups.com
> Sent: Wednesday, May 11, 2005 2:42 AM
> Subject: [WanderlodgeForum] Re: Are budget RVs really possible?
>
>
> --- In WanderlodgeForum@yahoogroups.com, Jim March wrote:
> > beancounterman wrote:
> >
> > > I note the conversations about the Drainmaster vs. Dupree valves,
> and
> > > the "cheapening" of the 450 LXi, with some interest.
> >
> > -sniiiip much discussion of coaches costing $800,000plus-
> >
> > You know...there's just got to be a way of producing a good durable
> > comfortable rig that doesn't cost more than a good-sized house with
> land.
> >
> > That's not saying there isn't a "millionaire's market", I'm sure
> there is ... but damn!
>
> Jim,
>
> This issue came up a while back on the original wanderlodge.org site.
> Someone had posted images and a description of a late model conversion
> based on one of Blue Bird's commercial chassis. Nicely done but with a
> few concerns about tank capacities, etc.
>
> Consensus at that time was that Blue Bird's business plan is based on
> low volume sales of high-end coaches in the $750K+ range with the
> M380's thrown in to compete with Monaco, et.al. (which some thought
> was a mistake - diluting the brand image, in other words.) Yet some
> thought that BB could earn more revenue in the long-run building
> coaches more in line with the FC's and SP's -> selling lower cost
> coaches in enough volume to actually make money. Manufacturing
> capability and flexibility issues combined with high costs associated
> with manufacturing complexity (too many parts & processes) limit a
> coach builder's response to changing market conditions and demand.
>
> Wanderlodges are great creations with a loyal following. They do
> depreciate in value over time but that offers those of us with a more
> typical net worth to get in on the fun. Another series of posts
> considered to total number of 'Birds built. Seems to me the total is
> about 6,000 coaches total - they really are rare 'Birds. But, happily,
> nearly every coach ever built is still out there (and NOT in a
> junkyard)!
>
> I'll get down off my soapbox now. Thanks for staying around this long.
>
> Jim Owens 77 FC33SB (Gas)
> Lake of the Ozarks, MO
>
>
>
>
>
>
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