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The Honolulu Advertiser
Posted on: Friday, January 22, 2010

New-car sales plunge in Hawaii

By Greg Wiles
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser
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Hawai'i new-car sales fell to their second-lowest level in 40 years in 2009, but dealers hope that the market slide may have reached bottom.

Figures provided by the Hawaii Automobile Dealers Association show 33,639 vehicles were sold last year in the Islands as sales of new cars and light trucks shrank by one-fifth compared with the year before.

Dave Rolf, association executive director, said he was told by the group's research firm that only one year had a lower total in the past four decades. He said he did not have the exact year and number available yesterday.

"It's still a precipitous drop from the year before," said Rolf, noting that Hawai'i's car market has been in decline for four consecutive years. The 2009 total was less than half the 70,268 sold in 2005.

The auto industry has been hit hard by the national and local economic downturn, with local dealers shedding about 1,000 employees out of the 5,000 they started 2009 with, Rolf said. The year was marked by ups and downs, with General Motors and Chrysler filing for bankruptcy while the Cash for Clunkers program provided a temporary sales boost.

Locally, Island Chevrolet shut down on the Big Island, leaving Hawai'i County without a General Motors dealership. The sales decline here tracked the drop in car and light truck purchases nationally, which were off 22 percent.

Rolf said the industry is still cautious about this year given recent salary cuts, state government worker furloughs and the upcoming jump in unemployment payroll taxes for employers.

"The first quarter will still be brutal," he said. "Then I think we'll start to see a slow climb out of that hole."

Figures from Auto Outlook Inc., a Pennsylvania firm hired to produce research and forecasts for the local dealer group, show there was a slight increase in sales here during the fourth quarter.

Its data show the number sold rose to 7,896 vehicles, or 87 more compared with the same 2008 period.

Auto Outlook is projecting sales will rise by 9.7 percent this year to 36,900. The firm said there is enormous pent-up demand for new cars and trucks and that new-car affordability is strong.

However, the forecast is lower than what Auto Outlook projected three months ago, when it said the 2010 sales were forecast to rise 12.9 percent in Hawai'i.

Rolf said his dealers are more conservative and are only projecting a 3 percent increase in sales this year.

Even if dealers are successful in achieving the latest Auto Outlook forecast, the number of sales will be below 2008's depressed levels.