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flyfisher 01-26-2006 12:11 PM

Airstream's 25% Price Increase In Past 2 Years
 
My wife and I were at the Tampa RV show last week, and got a price quote on a new 2006 30' Classic, thinking that we might want to replace our 2004 unit with a new one.

I expected that the new models would have increased in price, but I was more than a bit surprised to see that in the past 2 years (almost to the day) that the base list price on the 30' Classics have increased almost 25% (from $62,713 to $77,973). I know there have been some improvements, such as heavier axles and disc brakes, but I hadn't expected a price increase of $15,260. Including the options that we'd want, the total list price was close to $90,000!

Actually, the options on this model haven't changed all that much. For example, we have the Limited upgrade package, which has actually DECREASED from $7,841 to $6,731, and the other options have increased just a couple percent. (Anyone remember the lengthy discussion on this forum awhile back questioning the high price of the Limited option, compared to what you got for your money? Now it looks like we got... the shaft!:) )

In addition to the axles and brakes, there are other some nice features in the newer model that my wife and I would like to have (such as a choice of Corian colors, compared to the white color we now have, but I guess we'll wait a bit before plunking down all that extra money.

Anyone wish to predict when we'll see most Airstream trailers priced over $100,000?:D

swebster 01-26-2006 12:20 PM

What the market will bear...right?

53flyingcloud 01-26-2006 12:38 PM

Try checking out the ..
2006 Classic 34 w/slideout~!
Now, you really are a member of the Millionaire Club~!!

Silvertwinkie 01-26-2006 01:03 PM

These price increases are beyond the normal 3-4% cost of living increases.

At some point, the prices will need to stabilize and get closer to the 3-4% if they expect to sell trailers to the masses as they do now, understanding that the even selling to the masses is a small market, which will get a whole lot smaller if the coaches continue to increase at double digit percentages across the board.

wahoonc 01-26-2006 01:12 PM

The way I look at it is if AS/Thor keeps raising the prices it just makes my wonderful vintage project that much more valuable too:brows: Anybody want an Airstream Project? It is already disassembled for ya!:angel: :lol:


Aaron:cool:

2airishuman 01-26-2006 01:24 PM

Quote:

Originally Posted by flyfisher
the base list price on the 30' Classics have increased almost 25% (from $62,713 to $77,973). I know there have been some improvements, such as heavier axles and disc brakes, but I hadn't expected a price increase of $15,260. Including the options that we'd want, the total list price was close to $90,000!

easy now.......

that base msrp is for a 30 classic with slide.......i think.

the slide adds significantly to the price (7-9k$) and watching them make that little bitty piece......it probably costs that much to make.


the 30/31 base is upper 60s and the 34 is upper 70s.....still a lot of change to be sure.......

but who buys at list?

cheers
2air'

AgZep 01-26-2006 01:24 PM

Supply and demand. My understanding is that they are still selling trailers like crazy. So demand is up.

And the things ae made of aluminum, which takes vast amounts of electricity to extract. Energy prices are way up, so aluminum probably costs much more to produce. So supply is down. Of course, what's not aluminum in an Airstream is wood. Which is in short supply due to explosive growth in China, and Katrina rebuilding at home. And don't forget the plastic bits. Where do we get plastic? Petrolium.

If I remember right, the price on retrofitting disc brakes to a non-disc unit is around $8000.

All in all, I don't find the increases surprising.

flyfisher 01-26-2006 01:43 PM

Quote:

Originally Posted by 2airishuman
easy now.......

that base msrp is for a 30 classic with slide.......i think.

the slide adds significantly to the price (7-9k$) and watching them make that little bitty piece......it probably costs that much to make.


the 30/31 base is upper 60s and the 34 is upper 70s.....still a lot of change to be sure.......

but who buys at list?

cheers
2air'

You know, you just might be right! Although I asked them for a price on a 30' without the slide, in looking at the Retail Pricing/Sales Order that I got, it does show "30' SO Classic". Maybe the price increase comparing apples to apples isn't so bad - that would make the increase more like $7-$9,000 - perhaps 10-12%, which might not be so bad afterall. :cool:

markdoane 01-26-2006 01:54 PM

Quote:

Originally Posted by Silvertwinkie
These price increases are beyond the normal 3-4% cost of living increases.

I don't think cost of living increases have anything to do with Airstream price structure.

Real estate prices, yes. And those have been going up at the rate Airstream prices are climbing.

route66 01-26-2006 01:54 PM

Quote:

Originally Posted by AgZep
Supply and demand. My understanding is that they are still selling trailers like crazy. So demand is up.

And the things ae made of aluminum, which takes vast amounts of electricity to extract. Energy prices are way up, so aluminum probably costs much more to produce. So supply is down. Of course, what's not aluminum in an Airstream is wood. Which is in short supply due to explosive growth in China, and Katrina rebuilding at home. And don't forget the plastic bits. Where do we get plastic? Petrolium.

If I remember right, the price on retrofitting disc brakes to a non-disc unit is around $8000.

All in all, I don't find the increases surprising.

..............Parts for a two axle trailer shouldn't be over about 1500 , even at retail !! At the very Most , adding discs to a two axle trailer shouldn't run more than 2200 or so . Anyone who'd pay 8,000 for a 2,000 job would have to be devoid of rational thought . Just my .02's worth . r66:lol:

AgZep 01-26-2006 02:01 PM

Quote:

Originally Posted by route66
..............Parts for a two axle trailer shouldn't be over about 1500 , even at retail !! At the very Most , adding discs to a two axle trailer shouldn't run more than 2200 or so . Anyone who'd pay 8,000 for a 2,000 job would have to be devoid of rational thought . Just my .02's worth . r66:lol:

I was just relaying the price quote for a retrofit job, which I saw at Jackson Center. That price includes a whole lot more than just the parts. And I never even considered paying it. But that was the quote nonetheless.

My point is that the disc upgrade was far from trivial.

ZoominC6 01-26-2006 02:32 PM

Makes us love our 2004 Classic S/O even more! :)

2airishuman 01-26-2006 02:52 PM

Quote:

Originally Posted by flyfisher
You know, you just might be right! Although I asked them for a price on a 30' without the slide, in looking at the Retail Pricing/Sales Order that I got, it does show "30' SO Classic". Maybe the price increase comparing apples to apples isn't so bad - that would make the increase more like $7-$9,000 - perhaps 10-12%, which might not be so bad afterall. :cool:

yes the price bump that came with the axle upgrade, disc brakes and so on at the end of the 05 production was 7-9k$.....depending on double/triple.

i am intimately aware of this issue as i ordered, by phone, my decked out 34 kingsford edition just hours before the price increase; made a credit card deposit.

7 weeks later at closing/delivery my price was exactly as quoted by the dealer on the phone.....and he never mentioned the factory price bump. my buying experience was superb, included 80lbs of lpg, mounting the hensley, some other freebies and so on.... he sold me my trailer without ever bringing up the price change...and my orginal discount was great anyway.....

a few months later i was visiting the dealer (camping for free in his lot) and asked him about this issue. he acknowledged that airstream had bumped the price right after he phoned in my order.....the same day.

the factory held him to the new/higher price, they made no concessions to him, so he ate it on my sale......a first class place and person....most dealers would have called me and said......"i've got some good news and some bad news....."

it's rare to experience this sort of honesty in sales of anything these days...


cheers
2air'

of course the 06s have door bells and led taillights and some other goodies as part of the price increase....also the near priceless 75th emblem and deluxe copy of the book/cd...

Silvertwinkie 01-26-2006 03:08 PM

Taking away energy costs, etc. Airstream has had significant price increases every year I've been into Airstreams (late 2002). Though the cost of living increase is not a major factor, it is when folks get raises and bonuses based on it.

Though these are made of mostly aluminum, other RVs also have alum skins. A lot of RVs are still at beyond reasonable prices. Built as well, prob not, but they all buy tons of alum and the price increase on a Jayco, or Coachman (if they are still around) I'd bet are not as much as I've seen Airstream asking. Here's an example. The base on our 2004 Safari SS (built before the 2005 price increase) retail was $39k and some change. The prices I see on Airstream's site for the same base coach (I'm assuming this is the 2006 price, and that will most likely again go up for the 2007 model year) is now $42,788. It's at about 5%. Am I worried. No, but it does beg the question, how many extra percentages will it take before demand starts to slow? As has been pointed out, the demand is still there and, if you get the standard 18% off list, you're not really paying sticker, unless you want to.

Do I want a Jayco or a Coachman, not really. :D

flyfisher 01-26-2006 04:23 PM

Quote:

Originally Posted by Silvertwinkie
As has been pointed out, the demand is still there and, if you get the standard 18% off list, you're not really paying sticker, unless you want to.

Although I now see I was quoted a price for the wrong model, for what it's worth the price I was given was for about 22% off list. That was for a straight sale with no trade-in, and with no negotiations regarding the price quoted - although

The factory Airstream sales guy at the show did say that he would consider adding additional money to the dealer's discount if needed to close a deal -- so I assume a person may have done somewhat better than 22%.

Silvertwinkie 01-26-2006 04:47 PM

I'd love to know what it costs to build various size Airstreams.

I read somewhere it costs about $10 to build a Lincoln Navigator, and the retail price is in the high $40s, low $50s.

Not to sound greedy, I'd take dealer cost over build cost if I could get it. Seems there is a good deal of wiggle room built into these things. 22% is the best I've heard yet, except for model year blowouts that without any negot, are at 25% in some cases.

jcanavera 01-26-2006 05:27 PM

There is quite a good profit margin on RV's. A dealer friend of mine once told me that he could sell a travel trailer at 25% off MSRP and still make a reasonable profit. So really what controls the dealer's bottom line is his overhead and what he wants as a return. 25% is getting harder to get these days and a good deal is probably at the 18% level.

Jack

flyfisher 01-26-2006 06:05 PM

Quote:

Originally Posted by Silvertwinkie
I'd love to know what it costs to build various size Airstreams.

I read somewhere it costs about $10 to build a Lincoln Navigator, and the retail price is in the high $40s, low $50s.

Not to sound greedy, I'd take dealer cost over build cost if I could get it. Seems there is a good deal of wiggle room built into these things. 22% is the best I've heard yet, except for model year blowouts that without any negot, are at 25% in some cases.

The factory provides additional sales incentives for this show, the same as I assume they do at other shows and/or at other times of the year. That probably explains the larger discounts than you might see otherwise.

They also pay for the considerable space at the show that the dealer (Bates) uses to display his units. And, if you ever go to this show (one of the country's larger ones), Bates and Airstream have one of the 2 or 3 most prominent displays at the entire show - right inside the front door beside those $1.5 million Prevosts. It has to cost them MEGA bucks! The "poor" Airstream dealers who don't get this super treatment are really second class citizens.

As a former employee and (not so happy) present shareholder of Ford stock, I can assure you that whoever said a Lincoln Navigator only cost about $10,000 to build wasn't in the same finance department that I was in!:D I bet the employee and retiree health care costs alone amount to $2,000 per vehicle.:( Considering that Ford had net losses of $1.6 billion in North America last year (that's not worldwide, just in North America) one might argue that it actually cost them them closer to $60,000 to build each Navigator. (I'm just throwing out a hypothetical figure, and haven't the real numbers, but I'd bet it's directionally correct).

flyfisher 01-26-2006 07:01 PM

Quote:

Originally Posted by Silvertwinkie
I'd love to know what it costs to build various size Airstreams.

I'll make a SWAG on it (that's a Scientific Wild-Aszz Guess).

If you use a $50,000 MSRP for example, I'd guess the dealer's cost is $35,000 (and he has a 30% margin).

Overall, Thor reported they made a 17% Gross Margin on towable unit sales in 2005 (versus motorized units), with Selling, General and Administrative expenses of 5.5% of sales, and Net Profit Before Taxes of 11.5%.

Since Airstream is an older, established product and sells for a higher price than the the average towable that Thor sells, I'd bet Thor makes more profit, and has a higher gross margin on them than they do on other towables they sell.
I'd guess it is in the neighborhood of a 25-30% gross margin, and a net profit befrore tax of 15%, or possibly a bit more.

If that's true, then it costs them somewhere around $30,000 to build an Airstream that lists retail for $50,000.

Anyone have a better guess?:D

goldwing70 01-27-2006 08:44 AM

bought my 2005 25ft International last year for 22% off list. the dealer initially showed me the retail price but quickly accepted the counter offer. I had no experience in purchasing Rvs or Airstreams at the time but did call around to different dealers around the country for quotes. I suspect he still made a decent profit on my purchase.


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