Winnebago CEO Says Manufacturer Has Reached Pricing Peak

A picture of Winnebago President and CEO Michael Happe at a podium at the Newmar Dealer event April 2022

Winnebago Industries President and CEO Michael Happe said Winnebago has reached the peak of pricing the company can pass along to dealers and consumers.

Answering an analyst’s question about inflation and pricing, Happe said, “So if I were to guess, Q3 would probably be the potentially the current peak of the pricing power that we were able to demonstrate in the last year or two, and it will be more difficult, and we will need to be smarter and more selective when passing price on in the future.”

Happe said Winnebago will not be able to roll back prices for the rest of the year. Any adjustments to ease the impact of inflation on consumers’ wallets will come from dealers lowering prices, he said.

“Well, I mean, certainly I don’t see us at the present time, having the ability to roll prices back, first and foremost. So, in terms of pricing that consumers will see, that will be dependent probably more on dealer pricing strategies than OEM pricing strategies, I will say, in the rest of 2022.”

Retail prices escalated because of a significant supply and demand imbalance, Happe said. Dealer profitability on new units increased as a result.

“(Dealer) profitability is now relaxing to more historical levels or slightly better, and believe me, we root for dealers to be financially healthy because they are representatives to the consumer year-round,” he said. “I think you will see retail price fluctuation happen first because of the dealer strategies. At an OEM level we just continue to see inflation quarter-after-quarter escalate, or I shouldn’t say escalate, just continues to happen, it seems to be decelerating in terms of the degree of inflation, but it is still present with us.”

Winnebago will manage costs and efficiency and work with suppliers to limit taking pricing action.

Happe also addressed supply chain issues. Supply chains for each of Winnebago’s business segments are being disrupted to varying degrees and impacting inventory. The motorized RV business is seeing disruptions, in part because of the availability of motorized chassis. Winnebago is managing production output to match dealer demand for towables, he said.

“Inventories in our towables RV segment have returned to normalized levels, as parts supply stabilized and our second-quarter and third-quarter production output meaningfully addressed our backlogs, while motorhome RV and marine field inventories continue to remain below our targeted levels,” Happe said. “The supply chain for our marine and motorized segments are most acutely impacted by disruptions currently, and dealer inventories are the most constrained in these businesses.”

Winnebago will look to match output with dealer demand in towables, Happe said, and carefully drive increased motorized RV shipments in the short term.

Happe said Winnebago is confident the Winnebago RVs in the marketplace are relevant, fresh and what dealers want at this time.

“Almost 90% of the inventory in our RV businesses in the field is less than six months old,” he said. “0.5% is more than one year old.”

RV News magazine spread
If you are employed in the RV industry and not a member of the trade media, Subscribe for Free:
  • Daily business news on the RV industry and the companies and people that encompass it
  • Monthly printed and/or digital magazine filled with in-depth articles to increase profit margins
  • Statistics, data and other RV business trade information
X
Scroll to Top