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Analyst Says RV Deliveries Up

Baird analyst said dealers are ordering more recreational vehicles, likely helping sales at RV makers, but demand from customers is still uncertain.

NEW YORK (AP) -- A Baird analyst said dealers are ordering more recreational vehicles after a big decline in inventories, likely helping sales at RV makers. But demand from customers -- key to a sustainable rebound -- is still uncertain.

The RV industry has been pounded during the recession as Americans cut back on big purchases.

Analyst Craig Kennison said in a note Wednesday that Baird surveyed nearly 100 RV dealers. Inventory bottomed in 2009, and Kennison said dealers plan to more than double orders of motorhomes, and to order 51 percent more towables, in the next six months.

He expects RV maker Winnebago Industries Inc. to ship 5,300 motorhomes in 2010, up 142 percent from last year. That's short of its guidance for 6,800 to 7,600 motorhomes, he said.

While orders from dealers are growing, demand from customers, which is crucial to a rebound for RV makers, is uncertain. Kennison said the dealers expect retail demand to improve 5 to 10 percent this year.

Customer demand "must improve substantially to sustain the recovery," Kennison said -- but that's not a sure thing amid high unemployment and "problematic" credit conditions.

In the survey, demand for motorhomes was down slightly, but towable sales were up a bit.

"With an uncertain economy, we prefer less speculative consumer discretionary ideas," Kennison said.

He maintained a "Neutral" rating on Thor Industries Inc. and an "Underperform" rating on Winnebago.

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