To find out how an international business supplying the RV industry on both sides of the Atlantic operates and adjusts to the challenges of a pandemic and the current supply chain issues, we interviewed two senior executives from Airxcel, Inc: Jeff Rutherford, President and CEO of Airxcel Inc and Paolo Moresco, Managing Director of Airxcel Europe

Words John Rawlings

Aboutcamp BtoB: America and Europe: how have you dealt with the problems caused by the pandemic in these two continents? Were there any significant differences regarding the problems that emerged, and their solutions? Are the issues caused by the pandemic now ‘water under the bridge’ or still current?
Jeff Rutherford: Our business philosophy has been to source parts and components globally and assemble finished goods locally. We already had the experience of supply chain issues prior to the pandemic, as in 2018 when President Trump imposed tariffs on goods coming from China. As a result, we started looking for alternative suppliers throughout the world for most of our components, so when the pandemic came we had already qualified new suppliers ahead of our rivals that import completed products. As Covid started spreading round the world, we were able to move our sourcing strategy from one location to another. I can’t say that the pandemic has had no impact, but that effort in 2018 helped us mitigate supply issues directly related to the pandemic.

Aboutcamp BtoB: In the last year, we have seen an increase in demand for RVs, but also a reduction in supply due to the supply chain crisis. How has Airxcel Europe managed this period? What problems are you facing, and how are you trying to solve them? Also, what are the main differences between a company like yours that deals with components and accessories and the world of OEM RV manufacturers?
Paolo Moresco: At Airxcel Europe, we have not suffered too much at the moment thanks to the backlog of orders. We have a good balance between the OEMs and the aftermarket, and this helped us sustain quite stable volumes. The difficulties with the supply chain has motivated people to renovate old caravans and motorhomes or buy second-hand models. The second hand market has boomed, possibly more than the sales of new RVs. Therefore, we have not suffered as much as those businesses that are only focused on OEMs.

Aboutcamp BtoB: Do you have the same supply chain issues in the U.S. as in Europe?
Jeff Rutherford: It’s different, but the same. The vehicles that we utilise for motorised products in the U.S. are certainly different. We see a lot of Ford, Mercedes and Dodge chassis used for a range of motorised products, and there are some issues with availability still, as well as some components for the chassis on Class A motorhomes. As we look at the motorised inventory in general, in the marketplace the U.S. at the moment it is far lower than most dealers would like it to be. The towable inventory seems to be appropriate now, but motorised is still lagging, and that’s similar to Europe, I believe, where I think towables are fine, but the motorised inventory is lagging to where the consumers would like them to be.

Aboutcamp BtoB: How important is supplying OEMs to you, and how much does the aftermarket account for in your business? How has this changed since Airxcel has become part of the THOR Group?
Jeff Rutherford: Airxcel has always been a supplier to both OEMs and the aftermarket which has been our strategy for about 30 years, and that strategy has not changed since becoming part of the THOR family of companies. THOR is the parent company with a decentralized business model in which each company operates independently. We maintain positive partnerships with every manufacturer in the industry, as well as distributors and most dealers. Our change of ownership has not changed our strategy. We have no reason to change this.

Aboutcamp BtoB: What are the main differences regarding products and distribution between Airxcel in the USA and Airxcel Europe? And how many American products are sold in Europe, and how much of Airxcel Europe’s production goes to the USA?
Jeff Rutherford: Leveraging our European product expertise we have developed products that are specific and unique for the desires and requirements of European customers. The products that people buy are different, as are standards and expectations between the U.S. and Europe, so we have developed a set of products unique for Europe. There is only a small percent of products that are imported in each direction across the Atlantic, but our strategy is to source globally and build locally – so we produce products for the U.S. in the U.S., and for Europe in Europe.

Aboutcamp BtoB: How is Airxcel’s relationship with RV manufacturers outside the THOR Group? How has this relationship changed, and what changes are likely in the near future?
Jeff Rutherford: We sell Airxcel products to virtually every RV manufacturer in the industry, both in the U.S. and, I think, in Europe as well. That has not changed. Our market share that we sell to THOR companies and non-THOR companies has not really changed. We continue to sell to everybody in the same percentage. It’s the same as it has been historically. It would be fair to say that there is an Airxcel product on every RV in North America. It’s hard to think of any manufacturer who doesn’t buy some kind of Airxcel product. This is because the Airxcel family of products is so broad, which is why we can supply so many OEMs.
Paolo Moresco: I would say that Airxcel Europe supplies around 90 percent of RV manufacturers.

Aboutcamp BtoB: Which are the main markets for Airxcel Europe?
Paolo Moresco: We have good distribution in Italy, France, Germany and we are now quite strong in Turkey as well. We are seeing really strong growth in the southern countries rather than the north at the time being. I was surprised to see there are something like 1,000 van converters in Turkey! It is an incredible market, and we have become a number one brand in that field, so that makes it an important market for us (as well as Germany, France and Italy).

Aboutcamp BtoB: Everyone is experiencing a really difficult period at the moment – with the conflict in Ukraine, the energy crisis, rising inflation and political uncertainties in many European countries. What repercussions do you expect in the RV sector, and what actions are you going to take to tackle them?
Jeff Rutherford: The current situation in Ukraine and throughout the world is creating all sorts of challenges for consumers and businesses. When we think about what the future holds, nobody knows how long the situation will last, but as a company our focus is to do what we can to protect our customers, the communities we are in and our employees. One advantage we have compared to a year ago is the stability provided by new, RV industry-focused ownership. This gives us the ability to continue making investments and continue business as normal, so we expect to be a stronger business when we come out of this situation.

Aboutcamp BtoB: In the European market we have seen a shift in the last few years from the traditional camper (integrated or semi-integrated motorhomes) to the campervan, and now the trend of smaller, urban campers (mini vans with pop-up roof) is growing: how is Airxcel experiencing these changes?
Paolo Moresco: This trend has forced us to renovate our range and develop products that are smaller and lighter for these vehicles. This is not just a trend in Europe, it is in USA as well. We are all shifting down a size and this forces us to make changes for these new vehicles.
Jeff Rutherford: This is a reflection of consumers and their preference to enjoy the outdoors recreation, and one of the reasons you’ve seen a switch to people buying caravans is because the motorised chassis are not available, is that they are having to buy what is available to them due to supply chain issues. Consumers are keen to enjoy the outdoors, so some are buying caravans instead of campers, or buying smaller camper models if they are available.

Aboutcamp BtoB: Will Airxcel be showing any new products at the Caravan Salon in Düsseldorf?
Jeff Rutherford: We have lots of new products coming but they are not necessarily going to be presented to the general public yet. We have ground-breaking products. Our new products will be for the aftermarket sector as well, but we need to present them to our OEM partners first before we start talking to everyone else about them. It’s a staged roll-out.

Aboutcamp BtoB: Is Airxcel Europe planning any new investments for production site or product lines?
Jeff Rutherford: We have significant growth initiatives currently under way. In Kansas, we are doubling the size of our facility. We’ve invested in new production Aqua–Hot facility in Colorado, and in Indiana we’ve acquired a new facility and are in process of buying another. We’ve made significant investments in facilities and capital equipment to expand our capacity and product range. In Europe, there is no facility production growth expected, but there will be investment in capital equipment to add assembly lines instead.

Aboutcamp BtoB: What is going on with this outdoor recreational act in the U.S.? We have read you are an active part in this.
Jeff Rutherford: A couple of years ago the Great American Outdoors Act was signed and a significant amount of money was appropriated for outdoor recreation. How that was going to be allocated was not detailed, so what we’re seeing now in the current legislation is more about who gets the money and how is it prioritized to get to the right stakeholders. Everybody is on board with outdoor recreation and everyone is in agreement with investing in the infrastructure, so everyone is hopeful it will get passed in Congress in the coming months.