Not Your Dad's RV

Just six weeks after the 9/11 attacks, the RV division of Coachmen Industries, based in Elkhart, Ind., started selling a Spirit of America line of travel trailers with decals of Old Glory and red-white-and-blue pillows. The company expected to sell 400 of these $9,000 towable units — really just redecorated versions of existing models — but has sold more than 5,000. Nearly 90% of these entry-level RVs went to first-time buyers, half of them Gen Xers (ages 30 to 40).

The bold graphics and aggressive moniker of National's Rage'N RVT ramp trailer are a direct play for young buyers. The fold-up ramp on the back of this toy hauler is used for loading motorcycles and other large recreational gear. KIT RVs, a 58-year-old brand out of Caldwell, Idaho, changed its name in January to Extreme RVs and has outfitted its $30,000, 26-ft. toy hauler with a chrome and red-vinyl interior. Travel Supreme's new Me2, a $325,000, 41-ft. luxury motor home, includes a built-in garage with enough room to stash a stylish BMW Mini Cooper car to be used for local jaunts. (The $17,000 Mini is not included.)

Frequent upgrading by RV owners has been fueled not only by a strong trade-in market — RVs depreciate more slowly than cars — but also by the emergence of a new must-have feature called a slide-out. These expanding walls dramatically increase an RV's living space. Newmar of Nappanee, Ind., introduced the first motorized zoom room in 1990, and since then the industry has raced to offer RVs with two, three or even four slides. Carriage Inc. of Millersburg, Ind., just introduced the first five-slide, a 37-ft. trailer aptly named XTRM5, for $67,000.

Jim Emett, 42, a 911 call-center manager in Monrovia, Calif., bought a 22-ft. slideless motor home in 2000 and a year later upgraded to a 31-footer with one slide. Then last fall he went to his dealer to buy some supplies and left with a 38-footer with two slides. "We're not trying to keep up with the Joneses," Emett says, noting that he still drives a 1989 Mercedes. "We just needed more space."

Real estate broker Pat Miller, 47, lives in California wine country and is on her fourth RV in five years. "I tell my husband, 'This is the last one,' and then we see something nicer," she says. The Millers aren't crazy about their $190 fuel fill-ups — after the first, the credit-card company called to see whether their card had been stolen — but they like their RV's cruising range of 700 miles.

Towed trailers make up 80% of RVs sold, but the big money is still in motor homes, which account for roughly two-thirds of industry revenue. RVs are made with components from many companies — say, a chassis from Workhorse Custom Chassis, slide-out gear from Actuant and a generator from Onan, a division of Cummins. Back in 2001, RV demand fell so low that some assembly lines and entire plants had to be idled. Industry leader Winnebago of Forest City, Iowa, avoided layoffs with four-day workweeks and a short production halt late in the year. But as demand shot up in the wake of 9/11, the company was buried in orders and spent nine months running overtime. Indiana's Elkhart-Goshen area, home to more than a dozen RV makers, reported the country's highest job growth last year (up 4.6%). Thor Industries of Jackson Center, Ohio, which owns the well-known trailer brands Airstream and Keystone, has logged record sales of $736 million in the past six months and is building five additional plants in Indiana. Winnebago earned record profits last year and recently completed a plant in Charles City, Iowa, that will increase the company's production capacity 30%.

Demand this year has leveled off, and retail RV prices are softer. Many dealers offer low-rate financing, and there's even a tax break: most RV loans can be considered second-home mortgages, with deductible interest. Now that will make you feel at home.