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The Honolulu Advertiser
Posted on: Thursday, November 1, 2007

New-car sales in Hawaii on track to finish another year of decline

By Sean Hao
Advertiser Staff Writer

Hawai'i consumers are cutting back on new-car purchases.

New vehicle registrations fell 13.9 percent in the third quarter versus a year ago and were down 12.5 percent to 45,955 autos through the first nine months, according to figures released by the Hawaii Automobile Dealers Association.

The decline continues a downward trend that started in 2005. Last year sales declined 4.3 percent, reflecting a state economy that grew at a slower pace. Declining new-vehicle sales follow other signs that the state's economic growth is slowing following a prolonged period of robust expansion. During the past year, Hawai'i has experienced declining visitor arrivals, a drop in volume of home sales and a stabilization in home prices.

Through the first nine months of this year new-auto registrations fell in all four major Hawai'i markets (O'ahu, Maui, Big Island and Kaua'i).

At Windward Ford business is off about 20 percent year-to-date, said owner Mike McKenna. He pegged the decline to cyclical economic softness and the deployment of Marines overseas.

"Kane'ohe Marine Base is in our backyard," McKenna said. "They're a big part of our business.

"Hey, business is off all over — on the Mainland, too."

Rick Ching, general manager for Servco Automotive, which runs the Toyota dealerships in Hawai'i, also said the new-vehicle market has softened. He named the culprits: lower consumer confidence coupled with issues such as recent subprime financing problems, a slowing housing market, and higher fuel prices.

But models that get relatively good gasoline mileage sell especially well, Ching noted.

During the third quarter Toyota/Scion led all brands with 27.2 percent market share in Hawai'i followed by Honda (14 percent) and Nissan (11.7 percent). Japanese brands generally gained market share at the expense of the Big Three automakers, Ford, General Motors and Chrysler.

The Hawaii Automobile Dealers Association expects new vehicle registrations statewide to fall 10.5 percent this year, which is higher than a previously predicted 7.2 percent decline for 2007. The group expects registrations to fall 3.6 percent in 2008 followed by increases in 2009 and 2010

"Obviously a declining market is never a good thing, but as we have been emphasizing for quite some time, sales were humming along at an accelerated pace and a slowdown was inevitable," the auto dealer association said.

Reach Sean Hao at shao@honoluluadvertiser.com.

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