Auto sales revved up 7.7 percent in the second quarter in the isles and are projected to finish the year 4.3 percent ahead of all of 2014.
The Hawaii Auto Outlook report, prepared for the Hawaii Automobile Dealers Association, said technological advances helped drive the statewide increase in vehicle registrations.
Features formerly available only on luxury cars, such as rear-view cameras, blind-spot monitoring and automatic lane-drift alerts, now are available on many nonluxury models, the report noted.
Furthermore, local automotive experts believe Hawaii’s booming construction industry helped boost the light-truck market share to 56 percent during the second quarter versus 44 percent for cars. The market was more evenly divided in the second quarter of last year when light trucks had a 52 percent share and cars were at 48 percent.
Through June, light-truck registrations were up 10.3 percent over the first half of 2014.
The last time cars led market share for new vehicle registrations was in 2013, at 50.8 percent, a year when light-truck registrations already were on the rise, partly due to the growth of construction jobs.
“It’s wonderful that so many construction workers are working,” said Dave Rolf, executive director of HADA. “It means truck sales are going to be a little higher than normal.”
And it’s not all pickup trucks, Rolf added. The light truck category also includes sport utility vehicles, vans and minivans, he said.
The whole light-truck segment “is a very strong market,” said Glenn Inouye, senior vice president of Servco Automotive.
Gas prices are currently low, and dealers have been offering low annual percentage rates and favorable lease terms, “so it really stirred up the marketplace on trucks,” Inouye said.
Pickup trucks themselves have become more versatile as manufacturers have made them increasingly available with four doors, making them more attractive as primary vehicles for families, Inouye said. Four-door models are outselling two-door pickups, he added.
In the light-truck market, sales of the Toyota Tacoma make up 70 percent of the small-truck segment and 9 percent of the total vehicle market.
The 20,067 new vehicles registered on Oahu so far this year are clearly reflected in the island’s traffic woes, and by far outweigh sales and registrations on the neighbor islands. However, the figure represents only a 1.7 percent gain over the first half of 2014.
Maui County’s vehicle registrations were up the most, with the 3,490 vehicles representing a 17.4 percent year-to-date increase, while Hawaii island saw a 14.4 percent increase. The island of Kauai saw a 14.1 percent decline in sales.
Of the cars on Kauai that were bought and registered, the Detroit Three — defined as Chrysler, Ford and General Motors — enjoyed the largest market share.
Positive signs in the new report “outweigh the bad,” said HADA’s Rolf.
“We predicted in 2008 that we would be up to around 54,000 vehicles and (the report) is showing we’re going to do about 56 (thousand),” he said.
The second quarter was definitely stronger than the first quarter, which is typical as consumers in the first quarter still are recovering from holiday spending and also must contend with taxes, Inouye said.
“We think the rest of the year is going to be pretty strong,” he said. Inouye cited the more widespread enhancements to vehicle safety and driving pleasure, as well as “infotainment systems” becoming increasingly available in vehicles as well.
The Hawaii Auto Outlook report cited pent-up demand among consumers whose vehicles have a high average age as a factor that will spur sales through the rest of the year.
Economic and other factors that might weigh down sales include rising interest rates and insufficient household savings, in addition to hesitant consumer confidence. While many measures of consumer sentiment have recently improved, the report said, many U.S. households still are under a “pervading sense of uneasiness,” with stagnant household incomes and “a nagging sense that things are not as good as they should be.”
“The retail new car industry plays a very substantial role in the economy,” Rolf said. “It is traditionally a harbinger of how the economy’s going to be doing in the future.”
Rolf said the undulating rhythm of vehicle sales, when plotted on a graph, resembles the suspension cables of the Golden Gate Bridge.
Sales peaked at 70,268 vehicles in 2005 and hit a nadir of 33,639 registered in 2009, attributed to the global financial crisis that started in 2008. However, “the auto industry now is right back on track,” Rolf said.
Sales on the mainland are still going up, he said.
“We usually lag the mainland and if they’re still going up, we still have more up-times ahead,” he said.