Gloomy forecast for Isle auto sales
By Greg Wiles
Advertiser Staff Writer
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Hawai'i's auto sales this year are expected to be worse than previously projected, though a new forecast does include a glimmer of hope for the industry.
The forecast produced for the Hawaii Automobile Dealers Association predicts 2009 sales will be off by nearly one-fifth compared with last year, but also notes that the almost one-third drop in first-quarter sales could have been the bottom of the market.
"Obviously in this environment any sales prediction has a great deal of uncertainty, but we feel strongly that the market is at, or very close to, its low point," said the latest Hawaii Auto Outlook report.
"Simply put, new vehicle sales cannot fall much lower," it said.
Hawai'i auto dealers haven't been immune from a national double-digit percentage rate sales decline.
The decline in Hawai'i car sales accelerated late last year as the recession, rising unemployment and tight credit last fall contributed to a continuation of a four-year decline in sales here.
That's continued into this year, with the dismal first-quarter sales. Hawaii Auto Outlook reported that statewide retail light vehicle registrations, a number considered to be representative of new car and light truck sales, fell to 8,308 in the January-to-March period.
That worked out to a 30 percent statewide downturn from a year earlier.
O'ahu sales were off by 26 percent, to 6,189, and the decline was more pronounced in Neighbor Island counties:
The tumbling sales led Hawaii Auto Outlook to revise its forecast lower from the 16 percent slip it had envisioned for 2009 versus 2008.
It now believes there will be a 19.8 percent decline. If that holds true, only 34,308 cars and light trucks will be sold here, fewer than half 2005's total.
The forecast noted there were, however, some hopeful signs, such as pent-up demand reaching record levels and that purchases may resume once consumer confidence increases and the economy improves.
The economy isn't expected to recover until at least later this year, but yesterday the Conference Board reported that consumer confidence has jumped the most since 2005, reaching a five-month high.
The Hawaii Automobile Dealers Association also reported earlier this month that attendance at the recent First Hawaiian Bank Auto Show was up by 8.2 percent.
That was heartening to dealers, who say attendance at the annual show can be an indicator of future sales.
David Rolf, the dealer association's executive director, said people are being drawn back to showrooms because prices have come down, and because of significant rebates and a state excise tax deduction on federal income tax returns on new car purchases.
"Had you called me four weeks ago, I would have had lots of gloom to relay," Rolf said in an interview earlier this month.
"It's a much better report today than it was."
Reach Greg Wiles at gwiles@honoluluadvertiser.com.
