The move puts nearly 50 percent (47.1, to be precise) of the North American RV market in the hands of one company, according to Statistical Surveys, Inc., the leading provider of market data for the RV industry.
Jayco will operate as a subsidiary of Thor, leaving existing management in place for Jayco’s existing brands: Jayco, Starcraft, Highland Ridge, and Entegra Coach.
Some Elkhart County residents and industry insiders are questioning whether having one company control nearly half of the market is positive for the industry.
Kyle Hannon, president of the Greater Elkhart Chamber of Commerce, said that consolidation among RV manufacturers is a natural process and quite common for large growing companies.
Michael Hicks, an economist at Ball State University, says the merger is just the sign of a healthy RV industry. But, is Thor’s expanding presence and industry consolidation healthy for the consumer?
The chief executive officer of Forest River Inc. made a bold prediction several months ago at the RV Industry Breakfast in Elkhart. Pete Liegl predicted Forest River and Thor Industries Inc. would grow to each account for 40 percent of recreational vehicle sales nationwide.
Though both companies are growing, they’re no longer neck-and-neck competitors. Thor has cemented its position as the industry’s largest RV manufacturer; Forest River, owned by Warren Buffett-led Berkshire Hathaway, has become a distant second.
The data further indicates that 83 percent of RV manufacturing is now under the control of two people—Bob Martin, the CEO of Thor Industries, and Peter Liegl, CEO of Forest River. That puts us one merger away from a monopoly.
There are a few others, like Newmar, Tiffin, REV Recreation Group, Grand Design, Adventurer RV, and Lance, but together they control a much smaller segment of the industry. Today, just one in six RVs are manufactured by independent companies.
This consolidation of power in the RV industry around a handful of people is neither healthy for the industry or in the best interests of the consuming public. It lowers quality. Without competition, who really cares what customers think?
Large companies move slow and fail miserably on customer satisfaction. The focus is at the top, away from the market, and toward the bottom line.
When there are 20 players, each pretty much have equal power. When there are but two voices, they make the rules?
The concentration of power in the RV industry does not end with manufacturing.
On the supplier side of the industry, two large companies make a wide array of parts for the RV and manufactured housing industries. Lippert Components Inc. and Patrick Industries Inc. have grown rapidly, also through acquisitions.
Lippert Components has acquired a large number of RV suppliers in recent years and currently offers more than 100 products to RV manufacturers. Unfortunately, the company’s products don’t have a good reputation for quality control and durability. Consumer forums and social media are frequent avenues for venting about problems with Lippert products.
Parent company of Lippert, Drew Industries has invested nearly $300 million in acquisitions since 2009 and added 1,500 employees during the past two years alone. It owns 44 facilities nationwide that collectively have about 7,500 employees.
And on the distribution side of the industry, Keystone Automotive acquired Coast Distribution and now controls 80 percent of the RV aftermarket—products made available to consumers after the RV has been built.
Large companies grow at the cost of everyone else. As they become bigger and bigger, product quality, service, and customer satisfactions declines.
People forget how fast you did a job but they remember how well you did it.
—Howard W. Newton