With the ongoing challenges around tariffs and interest rates, North American recreational vehicle and marine dealerships find themselves in a difficult spot when it comes to near-term planning.

To put the current situation into perspective, I hosted a webinar on March 25 with two experts in the RV and marine space: Tristan Thomas-Martin, Leisure Analyst, BMO Capital Markets Equity Research, and Bruce Richard, Senior Relationship Manager, RV/Marine, BMO Commercial Bank.

They shared their insights on a range of topics, including the economy, trade, inventory levels, and what they’ve seen and heard at recent industry events. Following is a summary of their remarks.

As Thomas-Martin pointed out, every conversation about RV and marine begins with the economy. He said that while there was an initial uptick in demand post-election, the ensuing uncertainty has since left the industry unsettled.

“Dealers are a little more hesitant to order than they would have been,” he said. “When I talk to RV dealers and marine OEMs, there's just a lot of uncertainty, which is making it very hard to plan. It's hard to set production schedules, it's hard to think about the cadence of the year when you don't have a great sense of what's happening tomorrow.”

Tariffs and trade top the list of what’s driving uncertainty. President Donald Trump recently announced sweeping tariffs of at least 10% on all imports to the U.S., sparking fears of a global trade war. “It's part of every RV and marine discussion I have these days,” Thomas-Martin said. “Given the volatility, it's very challenging to quantify exact exposure.”

Thomas-Martin pointed out that marine has more potential tariff exposure than RVs, since the latter primarily depends on a domestic manufacturing and supply chain footprint. On the other hand, marine has more international exposure risk, as China supplies much of the fiberglass for the industry and the more technologically advanced components depend on international supply chains.

And that’s not to say RVs have no tariff risk exposure. As Thomas-Martin pointed out, Canadian leisure travel van OEMs could have a harder time exporting their products to the U.S.

“A lot of companies are thinking about surcharges and price increases,” he said. “There's a lot of levers they have, and I don't think anyone's finalized plans. I don't think that happens until we actually know exactly what the world is going to look like.”

BMO economists are expecting two federal funds rate cuts this year, which Thomas-Martin said will likely be a retail and wholesale headwind. “Higher rates for longer does have an impact on affordability. Affordability is still the most common concern we hear.”

Thomas-Martin said RV OEMs have done a good job resetting their pricing models. Year 2024 RVs, specifically towables, were reset 10% to 20% lower than some of their model year 2023 comparisons. Marine OEMs, he said, have taken a different approach.  

“They've slowed the rate of price increases, so historically, pricing would be up mid-single digits year-over-year. Now, it's closer to low single digits. It seems like they're set on keeping pricing where it is and letting interest rates address the affordability aspect.”

BMO expects RV retail demand in 2025 to be flat year over year, though Thomas-Martin said wholesale demand should be a little stronger as the industry begins to restock in the second half of the year. Marine retail demand should also come in flat with 2024, largely due to sustained demand among higher-end customers offsetting weakness among incremental buyers at the low end of the market.

Thomas-Martin said based on what he’s observed in the early season retail shows, traffic appears slower, but the quality of buyers has been strong—that is, fewer tire-kickers and a higher ratio of serious buyers. He added that the mood at RV shows has been more positive than at early-season boat shows, where pricing had been a headwind.

As Richard explained, the industry is working to adjust the return of a more normal trade cycle. During the pandemic, the industry saw an influx of new customers who were looking to engage in outdoor activities. With high demand and low supply, those customers purchased at the top of the market, sending gross margins higher than ever for many dealers.

“Now that we’re back to the normal trade cycle for customers, which historically has been somewhere in the four-to-five-year range, consumers are coming to the dealership, but they are underwater on that trade,” Richard said. “So, trying to structure a deal for that new purchase becomes problematic.”

But Richard noted that the coming warmer months should be a positive for both RV and marine dealers. “The warmer weather stimulates activity historically,” he said. “Campgrounds open up, access to trades become more available, so we really start to steamroll into the meat of the season.”