Hawaii auto sales skidded during first half of year

Cars and light trucks continued to move off Hawaii dealers’ lots at a snail’s pace during the first half of the year amid tight supplies that have prompted consumers to postpone making purchases.

The number of new-vehicle registrations fell 9.4% through the first six months, including a drop of 25.5% in the second quarter, according to a report due out today from Hawaii Auto Outlook. For the year, registrations are now forecast to reach just 55,500, a drop of 4.1% from 2021, said Hawaii Auto Outlook Editor Jeff­rey Foltz, who produces the report for the Hawaii Automobile Dealers Association.

“The lingering microchip shortage and pandemic-­related supply issues continue to be the primary factor impacting the market,” Foltz said. “Demand will soften in the coming months, but insufficient production is still the main roadblock holding back sales.”

He estimates that 17,400 new vehicle purchases have been postponed since the onset of the pandemic and ensuing vehicle supply shortages. But he said pent-up demand is accumulating and that this will provide a boost to future sales for an extended period.

Hawaii’s drop in auto sales is hardly exclusive to the state: Sales nationwide declined 17.9% during the same six-month period.

“Tight inventories have pushed vehicle prices upward, rising fuel prices have cut into disposable income, and higher interest rates are boosting monthly payments,” Foltz wrote. “Higher wages have helped, but monthly vehicle loan and lease costs as a percent of disposable income have moved higher during the past several months.”

Foltz said new vehicle sales almost always decline during an economic downturn like the country is experiencing now. But lean supplies, he said, already have pushed sales to low levels.

“It would take a deep recession for sales to decline further,” he said.

An array of new products coming out should help stem the downturn, he said.

“The bevy of new models being introduced offering alternative powertrains and advanced technology should lure many new vehicle shoppers into the market,” Foltz said.

Pandemic-related processing delays by the state Department of Motor Vehicles resulted in the state’s four markets posting decreases during the first half of the year compared with 2021, Foltz said. Registrations fell 11.1% on Maui, 9.9% on Hawaii island, 9.1% on Oahu and 8.9% on Kauai.

Statewide registrations for cars fell 18.9% during the first six months while registrations for light trucks, which include vans, SUVs and pickups, decreased 6.4%.

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. The data is based on county DMV registrations.

Toyota was the bestselling brand in Hawaii during the first half of the year with a 27.7% market share, followed by Honda at 9.8%, Nissan at 8.3%, Ford at 7.6% and Subaru at 6.0%.

The market share for the top-selling models in the first half of the year were To­yota Tacoma, 7.2%; Toyota 4Runner, 6.2%; Toyota RAV4, 4.1%; Toyota Corolla, 3.0%; and Nissan Frontier, 2.8%.

The state continued making inroads in electric and hybrid vehicle sales. Hybrid sales rose 8.3% during the first half of 2022 over the year-ago period. Electric vehicles increased 7% and plug-in hybrids rose 1.9%.

Tesla lost some of its momentum during the first half of the year as it captured a 24.6% market share of the state luxury market, down from 31.2% in full-year 2021 but still up more than 20 points from full-year 2017, when its market share was just 4.5%.