Hard times in the new-car business have claimed a major O'ahu dealership, Jackson Lincoln Mercury Isuzu, though pieces of the operation have been salvaged by another auto retailer.

Jackson Auto Group on Sunday closed its dealership at 2945 N. Nimitz Highway near Honolulu Airport, more than halfway into what is forecast to be a third consecutive year of declining new-car sales in Hawai'i.

Company founder Jack Jackson said industry struggles that include tight credit and weak consumer confidence were too much to bear. "The auto industry is in a perfect storm right now," he said. "I just flat made a business decision."

Jackson Auto will continue to operate its dealership at 704 Ala Moana selling Volvo vehicles, and a small Volvo service center in Hilo. "Volvo's doing well," Jackson said.

The Jackson Lincoln Mercury Isuzu closure resulted in a few people losing jobs, but a majority of about 35 employees were absorbed by Jackson Volvo and by Honolulu Ford, which acquired the Lincoln and Mercury business.

Honolulu Ford will sell and service Lincoln and Mercury brands, which are owned by Ford Motor Co., out of the $10 million dealership it opened three years ago in Kalihi at 1370 N. King St.

Jackson Auto's Isuzu business wasn't picked up by another dealer, though the brand is represented by Cutter Ford Isuzu on O'ahu.

Another brand formerly sold out of Jackson Auto's Nimitz dealership, Pontiac, was acquired by Pflueger Auto Group, which folded Pontiac into its dealership selling Cadillac, Hummer, GMC and Buick vehicles at 1234 S. Beretania St.

The changes by Jackson Auto reverse significant growth for a company begun a decade ago by Jackson, a longtime industry executive who bought Mike Salta Pontiac-Isuzu-Lincoln-Mercury from a retiring Salta in 1998.

Jackson Auto made its major expansion in 2001 when it acquired the Volvo dealership from TheoDavies Euromotors Ltd. At the time, Jackson Auto estimated that its annual sales would increase from $35 million to more than $55 million with the addition.

Industry sales however, have plummeted in recent years to challenge many retailers. Auto Outlook Inc., a research firm that tracks sales activity for the Hawaii Automobile Dealers Association, in July reported that new-car registrations for the first half of this year were down almost 20 percent following an 11 percent decline last year that represented a five-year low. Auto Outlook forecasts that sales will continue to slow next year.