Thor Can’t Get Enough Chassis to Meet RV Demand
Supply constraints may result in RV maker cutting production targets.
March 22, 2021
Thor (THO), a recreational vehicle (RV) manufacturer, is warning investors that its supply constraints are worsening. In the previous quarter’s 10-Q, Thor disclosed that supply constraint issues in Europe could result in lower RV production levels:

“In Europe, we have experienced some supply constraints from our chassis manufacturers...the availability of key components such as chassis could have a negative impact on our production output during fiscal 2021.”

In its first quarter 2021 10-Q, Thor added new language that suggests the issue has worsened:

“Additionally, primarily due to pandemic-related challenges, we have also experienced delays in receipt of chassis from our European chassis suppliers. In the short term, we expect these challenges to persist and, in particular, anticipate continued delays in receipt of chassis in Europe.”

Like it did the previous quarter, Thor tells investors it has identified a second-source supplier base for most component parts. However, Thor disclosed that chassis are unique, meaning it can’t immediately source European chassis from another supplier:

“However, due to engineering requirements, it is generally not possible to quickly change the chassis our various units are built upon. As a result, limitations in the availability of chassis will limit our ability to ramp up production of certain products despite dealer demand for those products.”
Europe has been relatively slow in rolling out Covid-19 vaccines. Not only has this contributed to the European chassis shortage, Thor says it’s also contributing to a labor shortage:

“In addition to material supply constraints, labor shortages may also impact our European operations, especially in light of the ongoing COVID-19 pandemic. Currently, a number of the employees of our production facilities in Europe reside in one country while working in another and therefore travel restrictions imposed by certain countries within Europe may negatively impact the availability of our labor force and therefore our production output.”
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