Hawai'i new car and light-truck sales continued to plummet in the second quarter this year and the outlook for the rest of the year and beyond is bleak.

New vehicle registration data show there were 11,918 automobile sales from April through June, a 19.6 percent drop from the same period a year ago. This followed a 17.4 percent decline in new vehicle sales in the first quarter.

The figures were compiled by Auto Outlook Inc., a research firm that tracks sales activity for the Hawaii Automobile Dealers Association. The data put Hawai'i new car retailers on pace for a third consecutive year of fewer sales.

Dave Rolf, Hawaii Automobile Dealers Association executive director, said the news did not come as a surprise.

"These numbers were pretty much what was expected and they reflect what's happening across the country," Rolf said.

Following the first-quarter report, Auto Outlook had predicted less-severe declines for the remaining of the year and painted a positive picture for 2009 with sales expected to increase by 3.1 percent.

But in its report released yesterday, Auto Outlook predicted vehicle sales to drop by 14.1 percent for the final half of this year and by 16.3 percent for the entire year. The firm did not issue a new prediction for 2009.

"Given the unprecedented level of uncertainty in the economy and the auto industry, putting an exact number on Hawai'i new vehicle sales in 2009 is very difficult," the report said. "At this point, it would appear that the market will fall further, but the rate of decline should be smaller than this year. An increase is possible in 2010."

Auto Outlook blamed two factors for the poor sales. The first was the "beleaguered state of household finances" and the other was skyrocketing fuel prices.

"Credit markets remained in turmoil, gas prices moved above $4 per gallon, the unemployment rate increased, consumer spending eased, and demand shifted dramatically away from full-sized trucks and SUVs to small cars. Not surprisingly the market has succumbed to this near perfect storm," the report said.

Bill Wiltshire, Honolulu Ford sales manager, said sales were down earlier this year, but have picked up at his dealership this month. As gas prices stabilized over the past two weeks, he said, people have been returning to the lots.

"They are very real numbers and they're a reflection of the market," Wiltshire said. "But at least in the short-term there seems to be some people that have had that first six months of pent-up demand that they haven't fulfilled because they've been waiting to see what happens, and now they're back out there in the market."

Wiltshire did acknowledge that Ford, which has been predominantly a truck dealership, has been selling more cars in recent months.

"It looks like there's some demand out there and people are being very selective," he said. "But there are people out there who need to buy automobiles."

Auto Outlook said the best hope for a quick turnaround would be for a rapid return to household financial health, the report said. But the poor economic outlook will likely make this a "lengthy process," the report said.

As gas prices rise, so has interest in the more fuel-efficient hybrid vehicles. During the first half of the year, hybrid vehicle sales increased 15 percent compared with the same period last year and 67 percent from the first half in 2005, the report said.

But hybrids had just 3.7 percent of the market share in Hawai'i compared with 2.6 percent a year earlier. The report said this relatively low market share was caused by a shortage of batteries to run the vehicles, but predicted that hybrid sales are "poised to take off."