Hawaii car sales have fallen 12% this year
The market is likely to remain sluggish on gas prices and Iraq deployments
Rising gas prices and the war in Iraq are the main reasons automotive dealers say are driving a decline in Hawaii car sales, which have fallen nearly 12 percent in the first half of the year.
Statewide vehicle registrations through June totaled 30,461, an 11.8 percent decrease, compared to 34,552 in the first half of 2006, according to the Hawaii Auto Outlook released yesterday by the Hawaii Automobile Dealers Association.
The market will likely remain sluggish for the rest of the year, with new vehicle registrations expected to drop 7.2 percent, though it is predicted to increase 2.1 percent in 2008.
"There are simply too many things holding the market back to allow for any sharp increase in sales," the report said. "As a result, the market is likely to languish during the rest of this year."
Each of the four counties recorded lower sales during the first half of the year compared to the same period last year, with the highest drop on Oahu at 13.9 percent and the lowest on Maui at 2.6 percent.
Slowing economic growth has affected some car dealerships more than others.
Sales are down 30 percent in the first half of the year for McKenna Windward Ford in Kailua compared to the year-earlier period, said Mike McKenna, company chairman.
Business also has dropped 30 percent at his dealerships in Southern California.
"People are just kind of gun-shy about buying things," he said, adding that the slowdown began in the middle of last year. "I'm just trying to make ends meet right now. I don't care about making money, I just want to break even. I do a lot of praying -- that's the only thing we can do."
Business for the JN Automotive Group's Mazda and Chevrolet dealerships near the airport also has declined about 12 percent because of the absence of military sales, which amount to 45 percent of the business, said Joe Nicolai, president of parent company JN Group Inc.
"The reduction in sales is a direct result of the Iraq-Afghanistan war," Nicolai said.
However, the company's high-end franchises that include Ferrari, Lamborghini and Maserati have not been impacted and sales are expected to remain strong throughout the year.