New-vehicle registrations hit the brakes in the first quarter

After seven years of growing Hawaii auto sales, the state could see a decline this year.

New-vehicle registrations in the state fell 4.3 percent in the first quarter and are projected to drop in 2018.

Consumer affordability weakened, pent-up demand waned and used vehicles became more attractive as prices came down, according to a report scheduled for release today by Hawaii Auto Outlook.

There were 14,459 registrations in the first three months of the year compared with 15,111 in the year-earlier period. The numbers were down on all four major islands. Hawaii is now forecast to end this year with 58,500 registrations, down from 59,137 in 2017 and just 15 more than 58,485 in 2016.

“Low interest rates, steady household income growth and high incentives combined to keep new vehicle affordability strong for many years,” wrote Jeff Foltz, editor of Hawaii Auto Outlook. “But this scenario is changing. Higher loan rates are boosting monthly finance and lease payments, which will keep some new vehicle shoppers on the sidelines.”

The light-trucks category, which includes vans, SUVs and pickups, widened its gap in popularity over cars in Hawaii. The market share for light trucks in the first quarter of this year expanded to 68.2 percent while cars represented 31.8 percent of the market. The numbers for all of 2017 were 64.3 percent and 35.7 percent, respectively. The popularity of light trucks has exploded in recent years due to stable gas prices, spurring potential buyers to seek out vehicles with additional cabin room for passengers and storage, as well as a higher seat position that allows the driver to see the road better.

Hawaii’s slowing vehicle market is following the national trend, which saw new registrations fall 1.3 percent in the first quarter.

“The market (in Hawaii) has plateaued during the past two years and is likely to drift lower in 2018,” Foltz wrote.

Still, Hawaii Auto Outlook suggests there could be a silver lining.

The 14,459 registrations in the first quarter exceeded the average of 13,216 for the first quarters in the previous five years, according to the report, which is produced for the Hawaii Automobile Dealers Association.

“From zero emission electric vehicles to every conceivable iteration of SUVs and trucks, manufacturers are serving up an impressive array of new vehicles,” Foltz wrote. “And these new models are packed with driver assistance and infotainment technologies that make the average 10-year-old vehicles on the road seem obsolete.”

While new-vehicle registrations can be representative of auto sales, the two don’t always align because a buyer can purchase a vehicle one month and register it in another month. The data are based on county Department of Motor Vehicles registrations.

Toyota and Honda were the clear-cut leaders in the first quarter as the top two brands in Hawaii with market shares of 27.1 percent and 15.1 percent, respectively. Nissan (9.7 percent), Chevrolet (6.5 percent) and Ford (6.4 percent) rounded out the top five.

The combined hybrid/electric vehicle share was 5.7 percent in the first quarter with the Toyota Prius and Tesla Model X the best-sellers in that combined category.