Drive right in: RV dealer plans to expand business

RURAL HALL, N.C. -- Gas prices might be surging and the economy might be tanking, but Bill Plemmons RV World plans to travel in a different direction.

The recreational-vehicle dealership wants to expand operations here and build on its existing customer base that extends throughout the country. It helps that many seasoned RVers don't let high gas prices keep them home.

Owner Steve Plemmons recently purchased 34 acres behind his dealership, bringing his complex to about 50 acres. He wants to use the additional land to construct a service building of up to 30,000 square feet and to create the Bill Plemmons Memorial Rally Park, which will have 330 sites for RVs to park.

"It's for the future," he said.

The dealership wants to grow its business with the overall expansion; it has 75 employees, including those in its Raleigh location. But the service addition -- expected to add up to 25 jobs -- is out of necessity.

The dealership needs more space as its service side is growing, Plemmons said.

The rally park also will "bring people to the state of North Carolina and to Winston-Salem," he said. The dealership is host to several rallies during the year. Its biggest -- an annual rally in October -- is on a much smaller scale than the proposed rally park would accommodate.

The city-county planning board has recommended approval of the proposed expansion and rally park. The proposal is expected to go before the Forsyth County Board of Commissioners in October.

RV World's expansion plans come at a time when retail registrations and shipments of motor homes and towable RV-travel trailers are down significantly in the industry.

For the first half of the year, motor-home registrations in the United States were down 32 percent, at 18,017 units, compared with a year ago, and registrations of towable RV-travel trailers were down 18 percent at 107,435 units, according to the National RV Dealers Association in Fairfax, Va.

Phil Ingrassia, a spokesman for the association, and Kevin Broom, a spokesman for the Recreation Vehicle Industry Association in Reston, Va., which represents RV manufacturers, cited several reasons for a decrease in sales.

"RVs are discretionary purchases and when we're in the kind of economy we're in right now with some uncertainty in the housing market, Wall Street and other financial things, people are holding their money a little closer," Ingrassia said.

Broom said that the biggest issue is the availability of credit as it relates to the country's mortgage meltdown.

"There are consumers who go into a dealership and they'd like to buy, but because of tighter lending requirements, they are not qualifying for loans anymore," he said.

He also said that consumer confidence is down and that home values have declined in parts of the country, leaving people less willing to use equity from their homes as part of the loan-qualification process.

But, Ingrassia said, every market is different. Some dealers have been hit hard by the country's housing issues while others have not.

He described Bill Plemmons RV World as a bright spot in the industry, citing Steve Plemmons' honor as the dealers association's 2007 Top Quality Dealer of the Year.

Plemmons declined to give sales figures, but he said that his new and potential customer sales are down 25 percent to 30 percent. Offsetting some of that decline is that sales from existing customers and service work is steady.

The dealers association expects business industrywide to pick up by mid-2009.

People are using their RVs and rentals are up, even with high fuel prices.

"RVers simply adapt," Broom said. "When fuel prices go up, they take shorter trips. Instead of taking the 3,000-mile trip across the country or something like that, they stay close to home."

(Fran Daniel can be reached at fdaniel(at)wsjournal.com.)

(Distributed by Scripps Howard News Service, www.scrippsnews.com.)