Pleasure-Way

Pleasure-Way is a Canadian company that builds awesome Class B motorhomes. At least they used to build them. Production has been placed on a temporary shutdown.

The company faces two challenges. One is COVID-19 and the other is Amazon.

COVID-19 will have a devastating and lasting impact on the RV industry. How it will unfold is speculation on my part. The RV industry was already facing a downturn. The travel and tourism sector has been struck a horrible blow and I don’t see a quick recovery. For the RV industry, it may well be a replay of the 2008/2009 great financial collapse where numerous industry players closed their doors and never reopened.

I like Class B coaches. Too small for us to consider as a full-time option although I do know some couples that give it a go.

An upside? Much easier to park a Class B somewhere during a pandemic than a Class A.

Pleasure-Way has been building motorhomes since 1986. I have watched many of Dean’s videos online — Dean Rumpel is the CEO — and I really admire his approach to his business.

Dun and Bradstreet cover the company. D&B reports 150 employees and sales of about $34 million in sale (USD). Pleasure-Way is not publicly traded and there really isn’t a way for me to assess the financial viability of the firm and their ability to remain solvent.

Like every other manufacturer, they have shut down their production. And perhaps they will be fine and weather the storm.

Curious about the second challenge they face with Amazon?

Unintended consequences.

The flagship product for Pleasure-Way is built on the Sprinter chassis. This model, the Plateau TS:

It turns out that it has become very difficult for the conversion builders, like Pleasure-Way, to get hold of a Sprinter chassis.

Let’s take a look at this 2018 news release from Mercedes-Benz.

• New part-by-part production facility with body shop, paint shop and final assembly opens in time for the U.S. market launch of the new Mercedes- Benz Sprinter
• First Sprinter out of new production delivered to Amazon
• New Partnership with Amazon includes the delivery of 20,000 vans for small businesses across the U.S., making the online retailer the world’s largest Sprinter customer
• Investment of approximately 500 million U.S. Dollars in new plant
• State-of-the-art intelligent production – with driverless transport systems, paperless documentation and exceptional digital training tools
• More than 900 employees at start of production; up to 1,300 team members planned by the end of 2020

Apparently, Mercedes can’t keep up with the demand from Amazon and that has impacted the Sprinter chassis availability in the supply chain for boutique companies like Pleasure-Way.

Pleasure-Way hints at this challenge in the FAQ section of their website:

How long does it take to get my new Pleasure-Way once I order it?

If you choose to place a factory order through a Pleasure-Way dealer there are several factors that may determine the lead time to delivery. Factors that affect lead time change periodically and may include, chassis availability, number of previously placed factory orders and time of year. The actual build time for each individual motorhome is approximately seven weeks, however, the current wait for factory orders is approximately five-six months from date of dealer order placement.

Amazon has literally drained market capacity and apparently this is just the beginning. From Car & Driver:

If you think you’ve been seeing more of those dark-gray Amazon delivery vans on the roads recently, you’re not wrong. But they’re delivering more than packages. As the vans head out, they’re also delivering for the auto industry. After all, someone had to buy the vans in the first place.

It’s no surprise that the 13th-largest company in the world (as calculated by Fortune) needs a way to get your packages to you. Today, Amazon’s transportation fleet is made up of 30,000 Amazon-branded delivery vehicles and 20,000 branded trailers, and those numbers are only going to grow. For example, Amazon has ordered 100,000 new electric delivery vehicles from Rivian, the startup automaker in which Amazon has invested $700 million, and this order is the largest ever for electric delivery vehicles.

While those Rivian orders will obviously help Rivian’s bottom line, the 30,000 delivery vehicles Amazon uses today that have already helped other automakers that sell vans to the retail giant, in particular Daimler’s Mercedes-Benz (Sprinter), Fiat Chrysler (Ram ProMaster), and Ford (Transit).

Amazon wants delivery vans. And their scale is so vast that a Sprinter chassis manufacturer builds a plant specifically to meet that demand. The dramatic and rapid rise on the demand-side contracts the supply-side for the segment of the RV industry that builds out Class B motorhomes.

And then a global pandemic hits and literally shuts down most of the economy. A shutdown that might deal a death blow to smaller RV companies.

Puts our challenges of finding a place to park our coach into perspective.

I hope Pleasure-Way makes it. Dean seems like a really good leader and Pleasure-Way builds a fantastic Class B motorhome.