Winnebago Acquires Grand Design RV

Several months ago, Elkhart, Indiana-based Thor Industries, the world’s largest RV manufacturer, purchased Middlebury, Indiana-based Jayco, Corp. for approximately $576 million in cash. That announcement sent shockwaves throughout the recreational vehicle industry.

That move put 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.

Jacks Landing RV Resort, Grants Pass, Oregon © Rex Vogel, all rights reserved

Jacks Landing RV Resort, Grants Pass, Oregon © Rex Vogel, all rights reserved

Hot on the heels of that announcement, Winnebago Industries said it had acquired Grand Design Recreational Vehicle Company, a manufacturer of towable recreation vehicles, for approximately $500 million in cash and newly issued Winnebago shares.

“Grand Design has built a tremendous reputation and position in our industry by delivering quality products and high levels of customer satisfaction, and we are excited to welcome them to the Winnebago family,” said Michael Happe, Winnebago’s President and Chief Executive Officer, in a company news release.

Founded in 2012 by Don Clark, Ron Fenech, and Bill Fenech, a management team with over 80 years of combined leadership experience in the RV industry, Grand Design is a fast-growing manufacturer in the towables segment with rapidly expanding market share. The Company generated $428 million in revenue over the last twelve months ending August of 2016, representing a compound annual growth rate of over 80 percent since 2013.

Hee Hee Illahee RV Resort, Salem Oregon © Rex Vogel, all rights reserved

Hee Hee Illahee RV Resort, Salem Oregon © Rex Vogel, all rights reserved

These deals come as RV sales are surging amid the nation’s economic recovery. RV shipments last year rose to 374,246 and are on pace to surpass 381,000 this year.

Once the Winnebago deal goes through, only three companies—Thor Industries, Forest River, and Winnebago—will control considerably more than 80 percent of all RV manufacturing. That means dealers and consumers have fewer choices as to companies with which they can do business.

There are a few others, like NewmarTiffinREV Recreation GroupAdventurer 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?

Toutle River RV Resort, Castle Rock Washington © Rex Vogel, all rights

Toutle River RV Resort, Castle Rock Washington © Rex Vogel, all rights reserved

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 three voices, they make the rules?

The concentration of power in the RV industry does not end with manufacturing.

Within days of the Grand Design acquisition announcement, Wichita, Kansas-based Airxcel announced that it has acquired Elkhart, Indiana-based Dicor Corporation, an RV industry supplier for over 32 years includes Dicor Products, United Shade, Vixen Composites, and Seal Design.

Dicor Corporation and its affiliates are known for providing RV roofing systems, wheel components, window shades, fiber reinforced plastic, composite paneling, window sealing as well as aftermarket care and repair products.

“The Airxcel management team has a deep level of respect for Dicor Corporation, its products, heritage and dedication to customer service. We are pleased to welcome Dicor Corporation and its talented team into Airxcel,” said Jeff Rutherford, Airxcel president and CEO, in a company news release.

Wondering if I’ll ever look at my Dicor EPDM rubber roof with the same confidence?

Canyon Vista RV Resort, Gold Canyon, Arizona © Rex Vogel, all rights

Canyon Vista RV Resort, Gold Canyon, Arizona © Rex Vogel, all rights

Worth Pondering…

People forget how fast you did a job but they remember how well you did it.

—Howard W. Newton

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