Auto sales on the rise, but report predicts drop in rate toward year’s end

Sales of new autos in Hawaii rose 13.4 percent during the first half of the year from the year-ago period but that pace is expected to slow during the final six months of 2013.

Light vehicle registrations are expected to finish the year up 10.8 percent at 47,100 units, below the average 50,000 vehicles sold each year through the past two decades, according to data made public Thursday by the Hawaii Automobile Dealers Association.

"In this economy one of the bright spots in Hawaii and the nation is the auto industry — it’s bright because we had to come back from so far down," said Dave Rolf, executive director of the group. "It’s a fairly large increase but you have to take into account how far down the whole industry in Hawaii had fallen. We are coming back at a robust pace because it was a very deep hole."

The Hawaii Auto Outlook report said it expects a slowdown partly because pent-up demand is easing and interest rates are rising. In addition, used car prices have reached their peak, reducing trade-in values and consequently increasing the cost of a new vehicle, the association said.

"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 said, adding that growth at a slower pace is expected to continue in 2014.

Sales of new cars rose 12.1 percent to 12,109 through June from 10,806 a year ago and represented 50.5 percent of the Hawaii market. Light truck sales jumped 14.8 percent to 11,867 from 10,334 and represented 49.5 percent of the local market.

In the second quarter, state auto sales increased 16.6 percent to 12,998 from 11,143 in the year-earlier period.

For the first half of the year, new hybrid and electric vehicle sales are on pace to set an annual record, with 1,638 new registrations, already exceeding the full-year total of 1,637 in 2011. The record is 2,744 in 2012.

Toyota was the top-selling brand with more than a quarter of the market through June. Honda was the second most popular brand at 14.3 percent and Nissan was third at 10.2 percent.

Auto sales were up 13.1 percent on Oahu, 16 percent on the Big Island, 15.6 percent on Kauai and 12.1 percent on Maui.

"From a historical perspective we’re still struggling, although it’s nice to see double-digit increases," said Mike Niethammer, president of King Windward Nissan and King Infiniti of Honolulu.

"We’re hoping for a steady increase, continued recovery. It seems to never come fast enough."