9 ways the RV economy is bouncing back

March 4, 2014, 5:11 PM UTC

One of the overlooked niches of the U.S. economy is the male leisure market, aka boys and their toys. These are the snowmobiles, jet skis, dirt bikes, and other motorized paraphernalia that active men use to entertain themselves in their off hours. One of the peculiarities of the business is that it tends to run at two speeds. When times are tough, men figuratively retreat to their caves, allowing FOR SALE signs to sprout like crabgrass on ski boats and weeds to grow between the wheels of their trailers. But when guys are feeling good, their enthusiasm becomes infectious. Manufacturers extend their product lines, expand their marketing, and allow innovation to flourish.

After years of delayed gratification, the male market seems poised for a breakout in 2014. Here's a look at some of the recent activity:

Size counts in personal-use pickups

Nothing says "Man on board" like a big, beefy pickup, and sales of personal-use trucks are roaring back. That is a matter of no small significance to truck makers; perhaps as many as 40% of the 2 million trucks sold last year logged miles away from the job site. General Motors (GM) is trying to lure leisure buyers into its new midsize trucks, but Ford (F) is betting they'll find more value in its full-size line -- and won't be put off by its aluminum body panels. Next year's all-new F-series will be available in 10 -- count 'em 10 -- trim levels, including Lariat, King Ranch, and Platinum that will drive sticker prices into $70,000 territory.

Harley is in hog heaven

King of the road, Harley-Davidson (HOG) still serves as a proxy for the heavyweight bike market. Its worldwide retail sales grew 5.7% in the fourth quarter of 2013 and 4.4% for the full year -- 260,839 bikes in all. That's fewer than Harley sold back in 2007, but that still ain't shabby for a premium-priced product with an aging owner base. Harley won't have the made-in-America chunk of the heavyweight market to itself much longer. In August, Polaris Industries (PII) launched three models under the old Indian brand, the first bikes that Polaris has completely designed, engineered, and manufactured since it bought Indian in 2011.

Hotel rooms on wheels

As retiring baby boomers head for the highway, RV sales have been on a tear. Shipments finished 2013 at a four-year high of 321,127 -- 12.4% ahead of the previous year. Motorhomes -- Winnnebago-size vehicles like Walt's meth lab on Breaking Bad -- were the big winners as shipments rose 36% to 38,322 units. It has been a long climb from the depths of the recession. According to the Recreational Vehicle Industry Association, RV-owning households have just now grown to a record 8.9 million, up from the previous high in 2005.

Snowmobiles in deep powder

Four brands -- Ski-Doo, Arctic Cat, Polaris, and Yamaha -- accounted for the bulk of the 144,000 snowmobiles sold worldwide last year, including 48,536 sold in the U.S. Model proliferation is becoming a headache. Arctic Cat (ACAT), which features eight product lines with some 60 models in all, reported lower wholesale sales at the end of last year, despite the wintery weather. Reason: It lowered dealer inventory by 14% to clean out unsold machines.

Smooth-riding off-road vehicles

Off-roaders continue to show accelerating growth, with annual sales up 13% in 2013 to some 250,000 units. Side-by-sides are the fastest-growing category. These small two- and six-passenger four-wheel-drive vehicles have attracted manufacturers ranging from John Deere (DE) to Bobcat. High-performance models bristling with racing accessories like roll bars and bucket seats are capable of speeds of 60 miles per hour, and can cost $20,000 or more. No driver's license is required, but collision insurance is extra.

Messing about in boats

The recreational boating industry is continuing its post-recession gains, projecting a 5% to 7% increase in new powerboat sales for 2014, on top of a 5% increase last year. Leading the industry's growth are small fiberglass and aluminum outboard boats 26 feet or less in size, as well as ski and wakeboard boats. Fishing remains the No. 1 boating activity in an industry that remains incredibly fragmented. The National Marine Manufacturers Association lists 50 engine manufacturers and several hundred boat makers.

Niches in boating niches

Attracting attention earlier this year was the high valuation on the initial public offering from narrowly focused Malibu Boats (MBUU). Tennessee-based Malibu specializes in boats to tow waterskiers, wakeboarders, and, increasingly, wakesurfers, where a surfer trails behind the boat, surfing the wake without a rope. Malibu, which claims 30% of the "performance sports market" and has nearly $200 million in revenues, raised some $100 million with its IPO.

Niches in motorized niches

Nobody slices the motorized vehicle market more sharply than Minnesota's Polaris, which makes a portfolio of two-, three-, and four-wheelers. Its latest: the Sportman ACE, a single-passenger, four-wheel, all-terrain vehicle for rookie riders with a compliant suspension. Coming in 2014: the Slingshot, a three-wheeled, on-road, two-seat motorcycle. When Polaris showed a Slingshot prototype at an investor meeting, its COO conceded it was in "a somewhat created category" but added, "We've done a lot of homework on this, and we think we've got a very innovative, superior solution frankly." One analyst estimated Polaris could sell 3,000 Slingshots annually at $20,000 each -- wholesale.

Retro revival

If opportunities to actually improve an existing product are scant, a popular tactic is to reposition a familiar old brand as "iconic" and use the nostalgia to reach a new audience. Harley has used that approach for years, and it has been so successful for Thor Industries' (THO) Airstream that the trailer maker is using its image of agelessness to move to a new level. "Airstreams are no longer just hip camping trailers," the company declared in a new release that recently arrived week. "They are mobile marketing units for brands like Fender and Veuve Clicquot; on-set homes for celebrities like Patrick Dempsey; mobile workspaces and pool houses." The approach seems to be working: Airstream sales rose 59% last year.