Motorhome maker Winnebago's average selling price falls

* Fourth-quarter average selling price falls 8.4 pct

* Backlog for more expensive motorhomes drops by half

* Demand strong for cheaper motorhomes - CFO

* Shares fall as much as 7 pct to 16-month low (Adds executive, analyst comments; updates shares)

By Ankit Ajmera

Oct 16 (Reuters) - Winnebago Industries Inc reported a drop in its average selling price as the company sold more lower-priced motorhomes in the fourth quarter, sending its shares down as much as 7 percent to a 16-month low.

The company, small but closely watched because of the view it provides on spending on big-ticket discretionary items, said its average selling price fell 8.4 percent in the quarter.

"(Demand for top-end motorhomes) is softer across the board for us than it was a year or two ago," Chief Executive Randy Potts said on a call.

Winnebago's recreational vehicles range in price from about $65,000 to about $426,000.

With U.S. household income hardly growing, investors are concerned that average selling prices for motorhomes may fall further in the next few quarters, Griffin Securities Inc analyst Morris Ajzenman told Reuters.

U.S. personal income rose 0.3 percent in August, according to data released by the Commerce Department last month. (http://reut.rs/1sKmtlQ)

As of Aug. 30, Winnebago had an order backlog of 302 for its most expensive motorhomes, down about 50 percent from a year earlier. These include orders to be shipped within the next six months. The company does not disclose its quarterly orders.

Orders were strong for cheaper motorhomes, which are targeted at families with younger children, Chief Financial Officer Sarah Nielsen said on the call on Thursday.

Backlog for such motorhomes, which sell for an average of $71,000, rose about 8 percent. (http://bit.ly/1F2I6B9)

Winnebago is ramping up investment in lower-priced motorhomes and expects to take a hit on gross margins next year, Nielsen said.

The company's net income rose to $12.9 million, or 48 cents per share, in the fourth quarter ended Aug. 30 from $10.6 million, or 38 cents per share, a year earlier.

Revenue rose nearly 15 percent to $245.9 million.

Analysts on average had expected a profit of 46 cents per share and revenue of $243.5 million, according to Thomson Reuters I/B/E/S.

Rival Thor Industries Inc, which makes RVs under the Thor, Airstream, Heartland and Dutchmen brands, reported a 21 percent rise in quarterly profit last month.

Forest City, Iowa-based Winnebago's shares were down 2.1 percent at $21.46 in late afternoon trading on the New York Stock Exchange.

Up to Wednesday's close, the stock had fallen about 20 percent this year, while the S&P 600 Consumer Discretionary index had fallen 11 percent.

(Editing by Rodney Joyce, Saumyadeb Chakrabarty and Kirti Pandey)