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Isle auto sales suffer setback during quarter

The Japanese disaster and the economy are blamed, but dealers report a strong July

By Erika Engle

POSTED:
LAST UPDATED: 02:26 p.m. HST, Aug 05, 2011


Hawaii's new vehicle sales dipped nearly 2 percent in the second quarter due to inventory shortages from the Japanese earthquake and tsunami, the slow economic recovery and higher fuel prices, according to the quarterly Hawaii Auto Outlook report. The report lowered its projection for the year to a 4.2 percent increase over 2010, versus its 6 percent projection in April.

Sales as measured by new vehicle registrations in the first half of the year were up just 1.1 percent to 16,748 vehicles compared with 16,562 a year ago.

The flat auto sales in Hawaii stood in contrast to the U.S. as a whole, where sales grew by 19.6 percent in the first half of 2011.

The Hawaii Automobile Dealers Association, which commissions the quarterly reports, had previously predicted sales would turn around beginning in July, and dealers say this month has been strong.

"July so far is by far our best month of the year, across all brands," said Nick Cutter, whose Oahu dealerships sell nine makes of domestic and imported vehicles. His Ford sales are on pace to be up about 30 percent over last year, and his Chevrolet business might see 22 percent growth, Cutter said. "It's hard to tell if it's sustainable, but we're hoping and praying." His Mazda business is "way up" as well.

Japanese car brands traditionally outperform domestics in Hawaii and own the lion's share of the Hawaii marketplace at 63.9 percent. But General Motors, Ford and Chrysler increased their market share to 18.7 percent for the first half of the year versus 17.6 percent a year ago. On the mainland the Big Three have a market share of 40.5 percent.

Hawaii Auto Outlook attributes the rise of the domestics only partly to Japanese brands' inventory woes and primarily to "a steady slew of impressive new products," including the Ford Fiesta, Ford Focus, Chevrolet Cruze and Jeep Grand Cherokee. The report also cited new products driving gains for Kia, Hyundai, Buick and Jeep.

Maui won the six-month local market race with an 8.9 percent sales increase, followed by a 3.1 percent rise for Hawaii County, a 0.1 percent uptick on Oahu and a 0.9 percent decrease on Kauai.

"We're seeing kind of spotty (sales) spikes in certain areas, and I think that's how a recovery starts," said Jim Falk, owner of Jim Falk Automotive Group on Maui. This month his two dealerships that sell nine brands have seen "big spikes" in Nissan, Chevrolet and Hyundai sales that will result in records for his Nissan and GM lines, he said.

Falk said car sales are improving because banks and finance companies are "becoming more accepting of marginal credit, and that really helps." He also cited a recovery in the tourism industry on Maui. The remaining economic element Falk awaits is increased construction.

"That's the other shoe we hope will drop at some point."






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