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The Honolulu Advertiser
Posted on: Tuesday, April 20, 2010

Hawaii’s car dealers hope their four-year slump is nearing end

BY Greg Wiles
Advertiser Staff Writer

Hawai'i's new car dealers are hopeful a disastrous four-year slide in auto sales is coming to an end.

Figures released by the Hawaii Automobile Dealers Association yesterday show 2010's first three months only saw a 1 percent decline in new car registrations, a measure thought representative of purchases of new autos and light trucks.

Dealers are hoping the state's economic downturn is coming to an end and that sales declines reverse themselves this year. Auto sales last year were less than half of what they had been in 2005. This year, dealers are hoping to see a slight increase.

"I don't think dealers are going out and celebrating at the moment, but we think the bottom is behind us," said Glenn Inouye, senior vice president of Servco Pacific, which operates Toyota and Scion dealerships.

Car registration figures compiled by Auto Outlook Inc. of Malvern, Pa., show there was a 1 percent decline to 8,229 automobiles sold during the January-to-March quarter. That compared with 8,308 in the similar period a year earlier.

But the report said there were more than 3,000 vehicles sold in March alone, only the second time in the past 18 months that has occurred.

"The key question on dealers' minds is: Will market conditions show continued improvement for the remainder of the year?" the report said.

"Or is it stuck in the doldrums for an extended period?"

Local dealers are hoping for improvements to increase through the year. David Higashiyama, marketing director of JN Automotive Group in Honolulu, said there is more activity in the showroom compared with six months ago.

"It's nice to see people are back in the market shopping," Higashiyama said, explaining showroom traffic, visits to the dealership's website and phone calls have increased.

Still, he said, the business remains uneven, with one week showing very favorable trends and the next coming in under expectations.

The Auto Outlook report said car sales on O'ahu rose 2.4 percent to 6,335, while they fell in other counties.

The Big Island's car sales were off 10.4 percent during the first quarter, while Kaua'i's sales dipped 14.4 percent. Maui was off 9.1 percent.

But dealers remain hopeful that Hawai'i's economy will continue to recover, though they note some uncertainty still hangs over the state in the form of government worker furloughs, the possibility that several hundred people may lose their jobs with the sale of Honolulu's daily newspapers and state budget woes.

"We probably will see in the second half of the year improvements, rather than from the onset of the year," Servco's Inouye said. He said Toyota's sales were hurt by news of unexpected acceleration in some models, but that a zero-percent financing offer had started to draw people back in.

A big factor remains the economy, he said.

"We still think there are some dark clouds out there."

Indeed, though Auto Outlook is projecting an increase in sales, it is lower than prior projections for 2010.

The report projected there will be a 6.8 percent increase in sales this year to 35,929.

That's down from the 9.7 percent increase it projected in a forecast it issued in January and lower still from a 12.9 percent increase it expected in October.

Still, Higashiyama said he's hopeful 2010 will be better.

"Last year was so tough," he said.

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