On a roll? What's behind the dramatic growth of Indiana's RV industry? Baby Boomers buying vs. higher fuel costs.

• Author: Kaelble, Steve
• Position: Cover Story

IT'S ALMOST LIKE A parallel universe, where conventional business wisdom doesn't apply.

It would seem like the past few years should have been tough on the recreation-vehicle business. The economy was in recession for a time and sluggish even longer, and gas prices have been moving ever-upward, which would seem like a poor climate for selling expensive discretionary items that don't exactly sip gas. Yet the RV industry--which is centered in Indiana--in recent years has enjoyed dramatic growth. And as sales have grown, Indiana's share of the business has increased as well.

IMPRESSIVE NUMBERS

The nation's RV makers shipped 370,100 units to retailers last year, according to the Recreation Vehicle Industry Association, a trade group based in Reston, Virginia. That's the best tally in more than a quarter century, representing a 15.4 percent increase over 2003 and a 44 percent gain over shipments in 2001.

Of the RVs shipped last year, roughly 236,100 came from Indiana factories, according to Mac Bryan, who watches the statistics in his role as RVIA's vice president of administration. Indiana's market share of 64 percent was up from the 58 percent figure recorded in 2003. The state's gains followed a series of new plant openings that helped fuel a shipment increase of about 50,000 units.

"We've seen several good years," observes Dennis Harney, executive director of the Recreation Vehicle Indiana Council and the Indiana Manufactured Housing Association. Results have been positive across the wide range of product types that Indiana RV makers produce.

The state is especially strong in towable RVs. Hoosier plants produce 69 percent of conventional travel trailers as well as 77 percent of fifth-wheels, those large RVs that hitch into the bed of a pickup or larger truck. All but 5 percent of the industry's hybrid travel trailers--which are hard-sided units with canvas-type extensions--are produced in Indiana. As for motorized RVs, Indiana makes 36 percent of the nation's Class A vehicles, the bus-sized gas and diesel RVs that tend to be the most luxurious varieties. But it makes 59 percent of the popular Class C RVs, those that are built onto a truck chassis.

"For a variety of reasons, the role that Indiana plays on the national scene continues to grow," observes Sherman Goldenberg, vice president of RV trade publications for TL Enterprises Inc. Among other things, Goldenberg oversees RV Business and Woodall's Campground Management from offices in Elkhart. "A handful of key companies have really pumped up the numbers. For example, Thor, Forest River and Jayco have really grown their business in Elkhart County."

Elkhart County, in fact, is the true center of the nation's RV industry. The majority of top players maintain manufacturing operations in or near the northern Indiana county, attracting a critical mass of suppliers and raw materials that in turn attracts more manufacturers. "Instead of resources being scattered more, they're being concentrated more," Goldenberg says.

"Indiana has numerous benefits when it comes to manufacturing RVs," says Jeffrey Miller, CEO of manufacturer Carriage Inc. in Millersburg. "The largest is a trained labor pool fluent in the construction and terminology of building recreational products. Another huge benefit is the close proximity to many of the major suppliers to our industry."

"The workforce is reliable and hard-working," adds Ron Fenech, president of...