EXCLUSIVE: Major Restocking Year Faces Challenge

A picture of Eric Stetler

This year is poised to be a major restocking year, Baird Global Investment Banking’s Recreation Team found, with OEM backlogs at record levels after 2020’s consumer demand influx.

In its January Recreation Sector update, analysts said RV, marine and powersports sectors experienced significant growth last year. Social distancing practices drove an increased participation in outdoor activities, Baird stated.

The RV industry’s off-season is seeing strong, but slightly slower, consumer demand during the colder months, Baird Director of Investment Banking Eric Stetler said.

Looking at its monthly RV data, Baird found current conditions in its dealer survey remained strong at 74 after dropping to a 65 last month.

“If retail demand stays as strong as it has been all year, it will be difficult to restock the channel,” Stetler said. “There are a lot of pieces, such as the vaccine rollout and other things. There will probably be some level of restocking in the later part of the year.”

Dealer inventories are beginning to rebound from record lows in summer and fall last year, analysts found, with manufacturers focused on increasing production and capacity to meet heightened demand levels.

“Demand has been very strong,” Stetler said. “Whether it is on the powersport or marine businesses side, or anything touching the outdoor recreation that’s experiential, like RVing and road-tripping.

“We expect that to continue, because once you get into that lifestyle, it ends up being something you stick with for a very long time.”

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