Hawaii auto sales more than doubled in second quarter

Hawaii auto sales were off to the races in the second quarter with new-vehicle registrations reaching the highest number in 14 years.

Registrations more than doubled from the depressed levels of a year ago and now are projected to jump 16% this year to 53,300, according to a report due out today from Hawaii Auto Outlook. Through the first half of 2021, new-vehicle sales were up 32% to 29,118 from 22,064 in the first half of 2020. In the second quarter, auto sales soared 104.1% to 17,117 from 8,385 in the year-earlier period.

“Even with supply bottlenecks and inventory shortages, new retail light vehicle registrations … were higher than the historically strong results in 2019,” Jeff­rey Foltz, editor of Hawaii Auto Outlook, wrote in the quarterly report. “If inventories were plentiful, it’s possible that state registrations could have exceeded 58,000 units in 2021.”

Foltz, who produced the report for the Hawaii Automobile Dealers Association, said healthy sales so far this year are due to unprecedented strength in what he refers to as the three key pillars of demand.

“Consumers have an elevated ability, want, and need to purchase new vehicles,” he said. “Individually and collectively, these three forces are at levels unseen for perhaps the past 30 years.”

Foltz said the combination of low interest rates, rising wages, accumulated savings during the pandemic, record-high household net worth and elevated trade- in values have “supercharged” consumer affordability and put a new-vehicle purchase within reach for a significant percentage of households.

He also said the desire for personal transportation has spiked as a result of the pandemic because of pent-up demand and due to the average age of vehicles on the road in the U.S. exceeding 12 years. He said “the bevy of new products hitting the market that offer an unprecedented array of body styles, powertrains, and safety features” will lure many auto shoppers.

Foltz said supply issues and inventory shortages are the controlling factors that will put a ceiling on sales this year.

“Dealerships can’t sell what they don’t have,” he said. “But there is a silver lining that partially offsets the pain of having more buyers than cars to sell: a cooling of the market, perhaps lasting for the rest of this year, will help to smooth out, and lengthen the post- pandemic sales recovery.”

Foltz’s preliminary forecast for 2022 is that auto sales will increase 5% to 56,000 units from 2021.

It was a strong quarter across the islands as registrations soared 61.3% on Hawaii island, 59.2% on Kauai, 55.9% on Maui and 21.9% on Oahu.

New-vehicle registrations can be representative of auto sales, but 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.

Light trucks (which include vans, SUVs and pickups) increased their large lead over cars with a 75.7% market share versus 24.3% for cars. More consumers are opting for the larger vehicles because of more visibility, additional room for storage and stable gas prices.

Toyota was the bestselling brand in Hawaii through the first half of 2021 with a 26.6% market share, followed by Honda at 14.3%, Nissan at 7.5%, Ford at 6.7% and Tesla at 4.8%.

The market share for the top-selling models in the first six months were Toyota Tacoma, 8.4%; Toyota 4Runner, 4.8%; Toyota RAV4, 3.9%; Honda CR-V, 3.3%; and Toyota Corolla, 3.2%.

As the state transitions away from fossil fuels, the market share of electric vehicles in Hawaii rose to 6.4% in the first half of the year from 4.4% in the year-earlier period. Hybrid vehicles encompassed 4.9% of the market share versus 2.9% a year ago, and plug-in hybrids’ market share was 1.2%, compared with 0.8%.