Tough times for Australian RV industry

Struggling local RV businesses hold out for post-pandemic sales boom

Once the shining light of the Australian manufacturing sector, the local RV industry continues to struggle through the coronavirus pandemic as uncertainty around the duration of lockdown restrictions makes buyers increasingly hesitant to fork out for a new caravan.

While unlikely any time soon to reach the 20,000-plus annual production highs of recent years, the good news is that many experts believe the industry will rebound strongly once camping restrictions are lifted.

Sydney’s Cub Campers, which celebrated its 50th anniversary in 2018, is just one of dozens of once thriving homegrown RV manufacturers hit hard by the coronavirus crisis, with production at Cub’s Sydney factory currently down by two-thirds; a far cry from the “three or four campers a day” output Cub was gearing up for in 2019.

Cub Campers factory in sydney

Helping keep the family-run business going is all 50-odd staff including managers being eligible for the JobKeeper wage subsidy, along with an order backlog that should keep the production lines going until at least June.

“In tough times you draw together, and while it’s a horrible process to go through I believe we’ll come out of this stronger than before.” Cub Campers’ CEO Simon McMillan told 7News.

Shut down until further notice

Cub Campers joins other struggling RV manufacturers, including those that have shut their factory doors either temporarily or permanently as a result of the coronavirus pandemic.

Well-known caravan builders Nova and Jurgens were among the first to announce temporary factory closures in March, with Nova suspending production at its 3000sq.m Campbellfield, Victoria factory about a week after Jurgens said it would stand down most of its workers and shut its 4000sq.m Pakenham, Victoria factory until further notice.

“The escalating situation including closure of borders, restrictions on the movement of staff, dwindling supply and decline in demand makes it impossible to operate our business,” Jurgens Australia owner Paul Kyriacou said on March 24

Jayco’s Melbourne factory has plenty of orders to keep it going

Caravan Trade Industry Association of Victoria CEO Rob Lucas told GoRV that many Victorian caravan manufacturers took extended Easter breaks, with those with existing orders planning to resume production by early May.

A monthly snapshot of local RV production, provided by the Caravan Industry Association of Australia (CIAA) provided some indication of the extent of factory shutdowns, with the CIAA reporting that due to “COVID-19 and Easter related temporary business closures, approximately 30 percent of (the 80-odd member) manufacturers” failed to supply production figures for the month of March.

Closed for good

Other smaller RV builders like Gold Coast-based Woody Caravans have been less fortunate, with the family-run business especially impacted due to its reliance on overseas buyers.

“In the last 12 months we have been battling some health issues that at this point we can no longer ignore. The ongoing economic state of the country has also led us to believe this is the right time to close the doors,” Woody Caravans’ Shane Hook announced on social media in mid-March.

Queensland’s Woody Caravans is a victim of the coronavirus crisis

Those with stronger order banks like big-selling Jayco, New Age and Patriot continue to run production lines albeit with social distancing rules in place. Queensland’s Kedron, which has an order book that stretches out many months but sells caravans directly from the factory, told GoRv that the closure of state borders had had a significant impact on the business,

“Having a majority of interstate orders, this prevented new owners entering Queensland for delivery,” Kedron’s Glen Gall said.

As a result and in consultation with customers, orders for Queensland buyers have been pushed to the front of the production queue, with interstate buyers forced to wait longer or until restrictions are lifted and they can pick up their finished van.

Queensland’s Kedron factory has been affected by state border closures

RV buyers stuck at home

With anecdotal reports that new caravan sales “dried up” for many dealers in April, some manufacturers have adapted by reducing operating days and cutting back staff hours, while dealers have reduced opening hours and run a skeleton staff while introducing social distancing initiatives like video browsing and home delivery.to keep sales ticking along.

Some RV manufacturers have looked at alternative avenues for sales, like Patriot Campers’ push to take advantage of new small business tax incentives by promoting its X1 camper as a tradie’s trailer, while Brisbane’s MDC has been advertising ‘mobile isolation unit’ versions of its hybrid off-road campers, suitable for mining accommodation or other remote industry applications.

Others like Queensland’s Zone RV have introduced new cut-price models to entice increasingly price-sensitive customers, or like Sunland made emotional ‘buy local’ appeals aimed at impatient, patriotic types.

Caravanning Queensland CEO Jason Plant told GoRV that some manufacturers are also ‘buying time’ by delaying production of non-essential orders or storing caravans for interstate buyers.

Production at Nova caravan factory was suspended in March

Post-virus boom predicted

While the timing is less certain, most industry pundits are predicting a strong, post-COVID-19 camping-led revival, as more people choose the safer option of travelling locally and international travel bans remain in place.

“Most manufacturers are optimistic about the future once COVID-19 is under control and life returns to some normality,” Plant said. “Many see drive tourism as set to boom as Australians will choose to holiday domestically for some time to come,”

CIAA CEO Stuart Lamont believes the “caravanning industry will be one of the first to deliver benefits back to regional economies when travel restrictions lift, with caravan parks ready and willing to accept guests with increased hygiene levels, management of social distancing and a diversity of product ideally suited to the management of COVID-19”.

“We need to hold strong as caravan and camping will rebound quickly,” Lamont said.