Tumult in the Trailer Industry
June 7, 2004
Filed under Features
By David Wells, Contributing Writer
It’s a tumultuous time in the powersports trailer business, with economic and regulatory pressures joining market forces to drive the evolution of this diverse industry.
Manufacturer churn has always been part of life in the light trailer business. And while the churn continues unabated, there is a definite trend towards fewer powersports trailer players with wider, often national, presence. Leading companies are expanding their marketing areas or consolidating under one corporate entity. Smaller companies continue to be squeezed out because they can’t adapt or because they simply find other businesses more profitable.
Coherent retail pricing has become difficult recently due to frequent and often substantial materials cost increases. Rising insurance rates and new government regulation, particularly NHTSA’s Early Warning Reporting (EWR), have further increased manufacturers’ costs.
Despite the problems, business is strong for most light trailer manufacturers. “Things are up rather dramatically in the small trailer market this year,” according to Leroy Crain, marketing manager of Dexter Axle. Mark Bliss, V.P. of components supplier Dutton-Lainson, agreed. “We’ve seen that the OEMs are very optimistic. Our sales are very strong, and so are our competitors’ (sales).”
It should be noted that several manufacturers indicated that they are not emphasizing powersports trailers right now because other businesses, like heavy equipment trailers, boat docks and lifts, or industrial equipment, are presenting better opportunities. Should this trend continue, some of these companies may exit the powersports trailer portion of their business.
The psychological effects of NHTSA’s new Early Warning Reporting requirement certainly aren’t helping the smaller manufacturers, either.