Baby Boomers paying cash for $160,000 motorhomes
The first wave of Baby Boomer retirees choosing to pursue a grey nomad lifestyle are disregarding falling house prices in Australia and continue to shell out up to $160,000 in cash for top-of-the-range motorhomes after finishing full-time work.
The chief executive of ASX-listed motorhomes and campervan rentals group Apollo Tourism & Leisure said there had been no slowdown in appetite for motorhome purchases from the main buying segment of new retirees, even though
house prices are falling in Sydney and Melbourne.
This is in contrast with the new car market, where listed car dealership companies
such as AutoSports Group and Automotive Holdings Group are under pressure.
Stockbrokers such as UBS partially blame the
wealth effect of falling house prices for more restrained consumer buying patterns for cars.
"The mindset is we've worked hard all our lives and we're going to enjoy our retirement," Luke Trouchet said on Thursday of the retiree viewpoint.
"They pay cash for the vehicles," he said.
"It's quite steady. It's as steady as it has always been".
Mr Trouchet said the new retirees generally paid $100,000 to $160,000 for motorhomes. "Very few of them use any form of finance."
Apollo sold $139 million of recreational vehicles including motorhomes, camper trailers and caravans in 2017-18, more than double the previous year. But a string of acquisitions helped push that along.
The one area of temporary softness was in caravans in the June quarter, when the Fleetwood business – at that stage a competitor – began heavy discounting of some brands to try to engineer a turnaround after being handicapped by its Western Australian base and the heavy transport costs required to send their vehicles to the major markets of the eastern states.
Apollo has since acquired Fleetwood and the Windsor and Coromal caravan brands. "The tyranny of distance made it hard for them," Mr Trouchet said.
Apollo will begin manufacturing the brands at its Brisbane operations soon. "We've consolidated the market."
Mr Trouchet said Apollo expected solid growth in its major markets offshore, where it runs large campervan rental fleets, as international visitor numbers remained solid. "We're seeing steady growth."
The company has a fleet of 1800 campervans, rental vehicles and Winnebagos in Australia, 850 in New Zealand, 2000 in North America and 250 in Europe. It also has manufacturing operations that make the vehicles it rents out.
He expected motorhome sales in Australia to stay robust this year. "We're feeling very optimistic at the moment," he said. In previous economic downturns, motorhome buyers tended to still buy confidently, but perhaps opted for a vehicle one rung down from what they originally aspired to. "They just move the price point."
Apollo
listed on the ASX in November, 2016 at an issue price of $1. The shares reached a high of $1.90 in late February but have since drifted lower to $1.50. Apollo expects to generate a net profit after of $22 million to $24 million in 2018-19, up from a bottomline profit of $19.2 million.
Apollo
expanded into the digital economy last year when it became the biggest shareholder in Camplify, which uses a similar business model to online marketplace Airbnb to enable people to hire out a motorhome or a caravan from private owners anywhere in Australia.
It owns a 25 per cent stake in Camplify, which has 2500 active campervans on its register and is preparing to start up a discount program with Caltex offering members cheaper fuel and other benefits.
Apollo also bolstered its rental operations in Canada with the acquisition of CanaDream, and in Britain and Ireland by buying the Camperco business over the past year.
Brisbane-based Apollo started out in 1985 when Gus and Carolyn Trouchet began renting out a pop-top camper from their house in suburban Brisbane. The Trouchet family remains a large shareholder in Apollo.
