Hawaii’s strong economy, low interest rates, tax benefits and new technology helped lift auto sales by more than 18 percent in the fourth quarter of 2014, a new report shows.
The Hawaii Auto Outlook showed 13,123 new vehicles were registered in the last quarter of 2014, up 18.1 percent from the year-earlier period, and far outpacing the national fourth-quarter increase of 7.1 percent.
"The general number is up so dramatically, (it) shows how robust the Hawaii economy is right now," said Dave Rolf, executive director of the Hawaii Automobile Dealers Association, for which the report is prepared.
Sales at Honolulu Ford "had a nice bounce," said President Mark Benson, saying the dealership was up 25 percent for the year.
"What helped propel us" at year’s end, was the reinstitution of a tax break for businesses buying equipment. The IRS Section 179 tax benefit was reinstated and increased on Dec. 22 "and it just exploded for us" in terms of truck and SUV sales, and to a lesser degree, car sales, Benson said.
The vehicles themselves are attracting more buyers, Rolf said. They are replete with technological advances that make models from a decade ago nearly obsolete, he said.
"Cars today are savvy, they are connected, incredibly stylish and full of features that move them down the road efficiently."
For the year, sales of Japanese makes continued to dominate the market with a 63.1 percent share, while the Detroit Three — GM, Ford and Chrysler — have 19.7 percent, and European emblems are at 10.2 percent of statewide sales, followed by Korean brands at 7 percent. Sales of electric and hybrid vehicles also rose to a record-high 3,659 units.
The Ford F-150 is the top-selling truck in the nation, and the Ford Focus, in its various iterations, is the No. 1 selling vehicle in the world, Benson said. In Hawaii, the top-selling vehicles are generally Toyotas, whereas for Ford dealerships, the F-150 truck and the Ford Escape compact SUV are the top sellers, he said.
A thin margin separates sales of light trucks and cars in the islands, and when the economy is good and construction is on the rise, light trucks take the lead, which was the case in 2014.
Dropping gas prices also have been a factor contributing to light trucks making up 51.1 percent of new vehicle registrations, compared with 48.9 percent for cars. It is the first time trucks have been in the lead since 2008, when trucks had 52.5 percent of the market, versus 47.5 percent for cars. The recession that followed put cars back at the top.
In recent history, Hawaii auto sales hit their apex in 2005 with some 70,268 new vehicle registrations, and following the global financial crisis, hit their nadir in 2009 with 33,639 registrations.
A bar graph depicting year-over-year auto sales resembles the silhouette of the Golden Gate Bridge.
"I don’t know of any other set of data that follows a rhythm like the car sales rhythm," Rolf said. "The dealers know it like surfers know the sea."
Rolf characterized the fourth-quarter rise in new vehicle registrations, not as recovery, but as "cyclical growth."
"I don’t know that anybody believes it can get up to 70,000 again," but the upward trend is nevertheless encouraging, he said.
"I think the next quarter will remain strong," said Benson of Honolulu Ford. Interest rates are low but are likely to increase "and people are out trying to get in front of those interest rates," he said.
