EUROPE RECREATIONAL VEHICLE MARKET

 

 

INTRODUCTION 

Around the 1800s, recreational vehicles were first seen in Europe in the form of covered wagons which were used for accommodation in France. After this, in the United Kingdom, they started being used by circus men and performers.

 

Over the years, there has been great advancement in the uses, designs and technology in this market. As the trend for leisure and entertainment activities among Generation Y and Z is increasing, more recreational vehicles are visible in the various campsites in the European region.

 

 

DRIVERS

There are many enablers of growth for the recreational vehicle market in Europe. Some of them are listed below.

 

• Since the main use of these vehicles is for leisure, the economic conditions of the region play an important role. The European region has high per capita income which drives the demand for recreational vehicles.
• Technological advancements are taking place to improve the fuel efficiency, ease of operating and to lower carbon emissions to help boost demand.
• Government initiatives which promote electrification of vehicles are encouraging manufacturers to produce electric RVs.
• Manufacturers are also expanding their current portfolio in the motorhomes division to provide more options to consumers.

 

BARRIERS

The main reasons why RVs do not appeal to consumers are :

 

• High cost of acquisition : Recreational vehicles can cost between $10,000 to $3,00,000 depending on manufacturer’s reputation, model, availability and other features. Class C motorhomes are the most expensive while pop up RV trailers are the cheaper variations. However, just purchasing cost is not the only cost that is to be considered while acquiring. Taxes, insurance and tow hitch costs are some other costs included while acquiring.

 

• High maintenance cost : Fuel, cleaning, oiling, storage and campsite charges are a few recurring costs the aggregate of which make maintenance of RVs expensive.

 

• Due to the coronavirus pandemic, there have been different restrictions in different countries which have slowed down manufacturing. The travel and tourism sector which was being promoted highly in the pre covid era is not receiving the same amount of encouragement currently which may hamper growth till end of 2021 at least.

 

MARKET SEGMENTATION

 

By Product

There are various types of recreational vehicles in the European market. Broadly they can be classified as motorised and towable but within each category there are a plethora of variations available. Below is a list of the variations:

 

1. Motorhomes ( Class A, B and C)
2. Toy haulers
3. Fifth wheels
4. Destination trailers
5. Camping trailers
6. Truck campers
7. Public safety vehicles (Example – fire trucks and ambulance)
8. Buses
9. Agriculture tractor and equipment
10.  Construction and material handling equipment

 

Out of the above types, the motorhome segment is expected to record the highest CAGR in the period 2021-2026, due to appealing features being offered such as comfortable interior space and the feel of a house with a kitchen and bathroom attached.

Further, the manufacturers are providing financial assistance in terms of offering lower interest rates. Camping capabilities as well as cooler piloting is also being worked upon to improve product penetration.

 

By Application

Various end uses of RVs can be recognized and broadly classified as private and commercial uses. The main applications are listed below :

1. Construction
2. Logistics and transportation
3. Government bodies
4. Agriculture
5. Healthcare
6. Other (such as retail)

 

By Geography

The main countries in Europe where recreational vehicles are seen are :

1. Germany
2. United Kingdom
3. France
4. Italy
5. France

 

Germany has the major market share currently and is expected to retain its position in the period 2021-2026 as well. The main reasons for this are that Germany has a substantial base for manufacturing.

The consumers are also readily adopting the use of recreational vehicles in that region making it an attractive market.

 

By Fuel

Just like for other automobiles, diesel is the most efficient fuel choice even for recreational vehicles. Most Class A motorhomes run on diesel, however gasoline powered recreational vehicles are also available. Due to Government norms, the demand for electric recreational vehicles may also rise.

 

MARKET DYNAMICS

The recreational vehicle market in Europe is expected to grow significantly. Towable RVs are expected to grow in popularity across the board. 

 

The lower cost of these vehicles when compared to motorised leisure vehicles is a driving factor for increased demand. 

 

Winnebago, Hymer AG, and Pleasure-Way Industries are among the industry participants concentrating on new model releases with many amenities to improve the consumer experience. 

 

Because transportation is the largest source of greenhouse gas emissions in the EU, reducing transportation emissions is crucial to meeting emission reduction and climate change mitigation goals. 

 

The advent of high-tech electric recreational vehicles in Europe is expected to expand the market for RVs.

 

The availability of a large number of charging stations, as well as enhanced infrastructure, will gradually increase the use of electric recreational vehicles.

 

 

COMPETITIVE LANDSCAPE

 

Looking at the supply side, we can say that the market is fragmented with several local and global players. There is fierce competition that the local players are facing to sustain themselves due to the presence of global players from the United States especially. Below is a list of a few prominent players :

1. Fleetwood RV
2. Forest River
3. Forks RV
4. Freightliner Custom Chassis
5. Grand Design RV
6. Lifestyle Luxury RV
7. Little Guy Worldwide
8. Navistar RV
9. Newmar
10. Pleasure-Way Industries
11. Prime Time Manufacturing
12. Renegade RV

 

There are many new players entering this market as well with changes in powertrain, design, electric mobility, etc. One such company is Nissan which entered the market in 2018.

 

 

RECENT DEVELOPMENTS

Companies are continuously innovating so that their market share is retained. With various options at the disposal of customers, product differentiation has become a necessity for growth in the recreational vehicle market. New technological advancements are being seen such as 

 

• Ozz Camper has introduced a hybrid drive system that incorporates wheels which are hub driven. Even for supporting the battery, a regenerative braking system has been launched.
• Electrification is a new trend in the automobile sector. Portable solar panels are being installed in motorhomes. This area provides huge scope of development and investment.
• For small tasks such as switching on the light mobile applications have been developed which help to make the experience in motor homes more luxurious and comfortable.
• Other advancements which are taking place are in powertrains, warning system, stability control system, cabin designs and integration of connected opportunities.
• Since the cost of ownership of RVs was seen as a major barrier to growth, new business models offering rental services may help to solve the problem. RVs are available at affordable price for private and one time use on various rental sharing platforms such as Yescampa, Campanda and DRM. It is expected that these services will receive more demand in the period 2021-2026 which in turn will drive the demand for recreational vehicles in Europe.