Hawaii auto sales plunged 41.8% in the second quarter as the work-from-home labor force, a near standstill in tourism, the closure of most recreational activities and a quarter million people unemployed left the industry parked on the side of the road.

The COVID-19 pandemic that has disrupted the state economy pushed down new vehicle registrations 24.1% through midyear, according to a report released Friday by Hawaii Auto Outlook.

New vehicle registrations are forecast to decline 25% for the full year before rebounding 8.1% in 2021, the report said.

“Thankfully, the first half of 2020 is now history,” Jeffrey Foltz, editor of Hawaii Auto Outlook, wrote in the quarterly report. “Attention is now squarely focused on what lies ahead.”

Foltz, who produced the report for the Hawaii Automobile Dealers Association, said the chances of a fast recovery seem slim, but there is more “upside potential” for the outlook than downside.

“The likelihood that the economic slump will significantly worsen is low, but the introduction of a vaccine or highly effective treatment for the virus would significantly increase the slope of the upward trend and decrease the frequency of the stops and starts,” he said.

He said defining the exact shape of the recovery is tricky because the outlook is almost exclusively dependent on the course of a never-before-seen virus.

Foltz said a V-shape recovery was initially projected for the industry. Then auto experts shifted their projections to a W-shape recovery. Now, Foltz said, the recovery has “shapes that look nothing like letters.”

He said the auto market is now in Phase 3 of a four-phase recovery. Phase 1 was the arrival of the pandemic and the ensuing shutdown. Phase 2 was sales getting a short-term boost from the release of some pent-up demand, resilient household incomes and the shift to online and remote sales.

Phase 3 is showing sales softening as initial pent-up demand is released, he said. The phase also includes tight new vehicle inventories, restrictions on business operations being slowly lifted, stimulus checks ending, unemployment compensation benefits easing, and consumer sentiment being impacted by concerns related to how long the pandemic will last and the consequences for employment and income.

Once the auto industry gets through Phase 3, the fourth and final phase is an extended period that could last for two years, he said.

“The trend is gradually upward, but sales will be subject to periods of ups and downs due to possible surges in the virus and any business shutdowns,” Foltz said. “The economic shock has been significant, and it will likely take years for a full rebound. The trend should be ‘upward sloping,’ but is unlikely to be steady or consistent.”

Despite the projected uneven recovery, Foltz said the trend is positive because vehicle affordability is improving due to low interest rates; pent-up demand is rising as vehicles wear out, leases expire, and the technology gap between new and old vehicles widens; and people’s behavior will change as they use their own vehicle as the best safe haven for travel opposed to other modes of transportation. He said the new-vehicle sales slump will lead to an estimated pent-up demand of an additional 15,077 vehicles by the end of next year when the pandemic fades and the economy recovers.

If those projections hold true, that will be a welcome relief for the state’s auto dealers, who saw new vehicle registrations drop sharply last quarter to 8,385 from 14,413 in the year-earlier period and for the first half of the year decline to 22,064 from 29,053.

All four island markets felt the impact of the virus. Through midyear, Kauai auto sales plunged 29.8%, Hawaii island auto sales fell 27.9%, Maui auto sales declined 26.8% and Oahu auto sales dropped 22.5%.

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 is based on county Department of Motor Vehicles registrations.

Toyota was the bestselling brand in Hawaii through midyear with a 25.3% market share, followed by Honda at 13.3%, Nissan at 8%, Ford at 7.4% and Chevrolet at 5.1%.

Light trucks (which include vans, SUVs and pickups) widened their large market share in Hawaii over cars during the first half of 2020, with 70.6% of consumers opting for the larger vehicles because of more visibility and additional room for storage. That is up from a 60.9% market share in 2016 and 48.7% in 2012. Only 29.4% of auto buyers purchased cars in the January-June period.

The share of hybrid and electric vehicles moved lower in the second quarter. At midyear, electric vehicle sales were down 4.4% from the year-earlier period, hybrids were off 2.9% and plug-in hybrids were down 0.8%.