This is the first in a new series, “Masters of Manufacturing” presented in partnership with The Indiana Economic Development Corporation. Each month we’ll share insights and ideas from innovative, growth-minded manufacturing CEOs from across the nation as they navigate this tricky time in history.
Thor Industries CEO Bob Martin is just coming off the recreational-vehicle industry’s biggest annual exhibition, and the RVX show in Salt Lake City earlier this month underscored two major ways in which the business that Thor leads is changing.
Overall RV sales are leveling off after a decade-long boom, posing challenges to Martin and his counterparts that they haven’t faced since the industry debacle during the Great Recession. And the marketing targets for brands such as Thor’s Airstream, Keystone, Entegra and Jayco vehicles are becoming broader, especially embracing the millennial generation that has become key to the industry’s future.
“Retail [sales] haven’t been incredible” recently, Martin told Chief Executive. “So we’re managing inventory and production in a cautious way. Dealers are feeling this year can be a flat year, which still would be very good. For ten years our industry has been on a growth spurt.
“So we see a little slowing – we’re not looking at a major falloff, just kind of a slowing. And dealers are trying to stay healthy by getting their inventories in line.”
Throughout the winter, Martin said, Thor Industries remained “conservative” about its output awaiting the onset of the crucial spring retail season. “We’ve been trying to make sure we’re not pushing dealers to bring inventory” they don’t need yet.
“We’ve had weird weather this year, too,” Martin said, including the famed “polar vortex” in February and “strange” conditions in the Pacific Northwest. But now that spring has sprung, RV dealers “are optimisitic and their inventories are coming more in line as they prepare for on-lot sales in April.”
Meanwhile, industry leaders have executed a big change in how they use shows such as RVX – the RV Experience – to market to dealers and consumers. “This is a new look to our national RV show,” Martin said. “We changed the time of year and the whole premise of the show. Before, we would invite dealers in and the goal was to sell them products for the year … The goal is to reach new demographics, the younger buyer, more effectively.
“This time, we brought in fewer products and instead emphasized some unique trends, including technology trends.”
For example, at RVX, the KZ unit of Thor debuted an environmentally friendly Sonic X RV prototype that features a lightweight carbon-fiber body and “endless” solar power. Thor also announced an exclusive and industry-first deal for its Keystone brand with General Motors for an app-based system that will allow purchasers of new Chevrolet pickup trucks to monitor and control functions in a trailing RV from the dashboard of the truck.
Previous big annual shows in the industry, he said, were largely business-to-business affairs where major manufacturers including Thor and Winnebago Industries showed off their wares to dealers and curried wholesale orders. But beginning with RVX, he said, the industry pivoted toward a “more automotive-style show” aimed primarily at generating consumer and media interest.
“We showed off more prototypes and innovative products rather than to sell to dealers,” Martin said. “We wanted to connect to consumers and to people who may not understand what the RV lifestyle is.” And indeed, he said, of the 150 media members who covered the Salt Lake City show, “almost none were RV-related.”
Thor and other industry leaders will continue to have their own B2B-focused shows, and individual geographic markets stage RV exhibitions as well.
Whatever happens in RVs, as the leading seller, Elkhart, Indiana-based Thor is a main driver. The company also has overhauled its marketing approach with a new web site and content for the parent company, more robust social-media efforts for Thor and brands such as Airstream, and a new tag line, “Go Everywhere, Stay Anywhere,” among other initiatives.