Isle car dealers expect 7% gain in current year

New car sales rose 4.4 percent in 2011 and could rise nearly 7 percent this year, according to the Hawaii Auto Outlook, a report prepared quarterly for the Hawaii Automobile Dealers Association.

New vehicle sales and registrations shot up 11 percent in December over the year-ago period, following what the report called an abatement of the negative events of the fourth quarter.

Pent-up demand, growing consumer confidence and improving household debt levels have led Hawaii Auto Outlook and HADA to project a 6.9 percent increase for 2012.

The 2011 increase in new vehicle registrations was the second annual gain in six years, following a 1.1 percent increase in 2010 from 2009.

Some 35,531 new cars and light trucks were registered in Hawaii in 2011, up from the 34,019 registrations of 2010.

The number is far from the record 70,268 registrations in 2005.

Hawaii’s 4.4 percent annual rise is dwarfed by the 14 percent year-over-year increase on the mainland, but "we typically lag behind the mainland," observed Nick Cutter, whose name is emblazoned on seven Oahu dealerships that sell numerous makes of cars and trucks.

The so-called Detroit Three automakers, GM, Ford and Chrysler, saw increased sales that boosted the brands’ market share in the islands, to 18.9 percent from 17.6 percent.

"I think Chrysler’s on the mend, and they’re doing well and gaining sales, and it’s a good story," Cutter said. One factor in improving domestic model sales numbers, he said, could be the production cuts for imports, including Toyo­tas and Hondas, that followed the earthquake in Japan and floods in Thailand. These cuts hit the Hawaii auto market particularly hard, as did high fuel prices in the beginning of the year and the U.S. government’s debt downgrade, Hawaii Auto Outlook reported.

The Japan-made car market in Hawaii took a 3.8 percent hit year-over-year, to 61.3 percent of the market share versus 65.1 percent in 2010.

"Our supply of hybrid vehicles and other selected models were most impacted and we felt the effect of that well into the fourth quarter of last year," said Rick Ching, president of Servco Automotive, which sells Toyota, Lexus, Scion and Subaru models, among others.

The dealerships’ line of Toyota Prius models has been expanded with larger and smaller models, and the Prius Plug-in Hybrid will be added this spring. Otherwise the company’s dealerships are back to "pre-tragedy inventory levels" across all models, he said.

Registrations of Korean-made brands Kia and Hyundai soared 40.7 percent over 2010, going to 7.8 percent market share from 5.8.

Hyundai hired some vehicle designers away from BMW and Mercedes and "a lot of people are double-taking looks," said Gavin Yamada, sales manager at Tony Hyundai Honolulu. He attributes increased sales not only to improved "body design (and) sharp lines," but to the company’s more generous five-year, 60,000-mile warranty, as shoppers look for value.

Hyundai is having a hard time keeping up with demand, he said.

The situation is similar for Bill van den Hurk, president of Aloha Auto Group Ltd., operator of the state’s Aloha Kia dealerships.

"Our business right now is good," van den Hurk said. "My biggest problem right now is shortage of product," as the brand is setting sales records worldwide. Some mainland dealers have doubled their business, he said.

"I think the business as a whole, (the industry) is going to pick up. There’s no question," he said. "People are feeling a little more comfortable with the economy."