Big Isle auto sales surge

By COLIN M. STEWART

Tribune-Herald staff writer

Hawaii Island led the way in the state during the first half of 2013 in new car sales, according to the latest Auto Outlook scorecard from the Hawaii Auto Dealers Association.

Big Isle new retail light vehicle registrations increased by 16 percent through the end of June this year, compared to the same period last year, when a total of 2,517 new registrations were filed. The statewide average growth was 13.4 percent, with Maui showing the smallest increase of 12.1 percent, followed by Oahu at 13.1 percent and Kauai at 15.6 percent.

While the numbers are encouraging, Hawaii Auto Dealers Association Executive Director Dave Rolf warned that the state’s auto industry is still working to repair the damage done during the global economic crisis.

“We came out of such a deep valley, you know,” he said. “It’s encouraging to see such a robust return in sales, but you have to look at the overview. We’re still not up to the average numbers in sales we saw over the past 20 years.

“The reality of it is that we came from such a deep valley in sales. We lost about 50 percent. Now, we’re kind of coming back up to normal. But, the sales are robust. The auto industry, both locally and nationwide, is one of our economy’s bright spots.”

The dealer’s association projects that the state’s auto industry will continue to grow through the end of the year, albeit at a slower overall rate of 10.8 percent. Pent-up demand is easing, according to the outlook report.

“The vehicle fleet in the U.S. is still at record-high levels, which will help keep the market moving in a positive direction, but the boost supplied by pent-up demand will subside somewhat during the next 18 months,” the report states.

Meanwhile, interest rates are expected by economists to increase gradually for the foreseeable future, leading to higher monthly payments that could hamper consumers’ ability to afford new vehicles. Also, experts believe that used car prices reached their peak in mid-2013. Softening used car prices reduce trade-in values, the report states, thereby increasing the net cost of a new vehicle purchase.

Despite such predicitions, car salesmen are a hard lot to keep down, said Marty Barger, general manager at Big Island Honda in Kona.

“I’m a typical car guy. We are eternally optimistic,” he said. “I jokingly tell my wife that one of the reasons I love the car business is that I start fresh every month.”

Barger said that his dealership has come back in a major way since the economic downturn, and he hopes that will continue for the foreseeable future.

“We’re up over 30 percent over last year,” he said. “We’ve hired three new salespeople, three new mechanics, and our shop is booming. And we’ve got a lot more inventory than we’ve had for years.

“About a year and a half ago, we were down to about eight new cars in stock, because of the tsunami and other things. Honda couldn’t produce enough for us. We normally sell in a month between 30 and 50 new cars. But we were down to eight a month. It was a little frustrating. But, I’ve got 140 or 150 cars in stock right now.”

Barger added that Big Island Honda has already broken its all-time best sales record three separate months this year.

“We just broke it, and broke it, and broke it,” he said. “This month, it looks like we may break it. We have been having record business overall. It’s great. The car business wasn’t fun for two or three years there. It was more like ‘Oh God, are we going to be able to keep the lights on?’”

Wayne De Luz, vice president and general manager of Hilo-Kona Mazda Subaru, said that he believes car dealers owe much of their current success to the phenomenal deals car buyers are getting on auto loans.

“Last year we saw a lot of sales due to pent-up demand, but I think that’s waning now. I think it’s more financial. I’ve never seen it be cheaper to buy a car, from a financial standpoint, than it is right now. People, especially on the Big Island, they drive a lot, and they’re looking to buy a car, and they have these really strong incentives.

“It’s actually causing a little bit of a shortage for us,” he added. “We’re growing in Hilo, economically, and we’re starting to see more demand for full-size trucks from construction workers. Trucks in general are doing a lot better.”

Statewide, cars represented a 50.5 percent market share, compared with 49.5 percent for the light truck category, which includes pickup trucks, SUVs and vans. Hawaii Island’s market share for light trucks was 57.6 percent, the second highest in the state, behind Kauai with 65.8 percent.

Japanese auto brands continue to dominate the Big Isle’s car market, with Toyota taking the top spot with 31.8 percent of the market, Honda taking 19.6 percent, and Nissan taking 11.4 percent. They are followed by Ford with 5.9 percent, Chevrolet with 2.8 percent, Hyundai with 3.2 percent, Mazda with 3.2 percent, Kia with 3.1 percent, BMW with 1.5 percent, and Lexus with 0.6 percent.

Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.

Hawaii New Vehicle Registrations Market Summary Hawaii Kauai Maui Oahu

2012 thru June 2,169 859 2,285 15,827

2013 thru June 2,517 993 2,562 17,904

Percent change 16.0% 15.6% 12.1% 13.1%

Information courtesy the Hawaii Automobile Dealers Association