A new study predicts even lower new-car sales for the year than projected earlier this year—down 22.4 percent, versus the 19.8 percent decline predicted after the first quarter.

However, the decrease may have stabilized, according to Hawaii Auto Outlook, prepared quarterly by Pennsylvania-based Auto Outlook Inc. for the Hawaii Automobile Dealers Association. An increase of 12.9 percent is forecast for 2010.

The study measures sales by the number of new-vehicle registrations in the state and breaks them out by county, vehicle type and manufacturer.

Its newest projection for 2009 predicts total registrations of 33,227 versus the 34,308 projected earlier this year—and against the 42,804 total registrations in 2008.

The hard numbers and projections reflect a precipitous drop from the record 70,268 registrations in 2005.

Year-to-year sales have since declined steadily—by 4.3 percent in 2006, 14.4 percent in 2007 and 25.6 percent in 2008.

“;If car sales are a proxy, really, for what's happening with the economy, that's as graphic a picture of the economy as you can find,”; said Dave Rolf, HADA executive director.

Local Cash for Clunkers

 

A new government plan to help car sales is set to begin and will be available for three months.

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New-car sales are “;such a precise indicator when triangulated with construction workers employed and now, with hotel rooms occupied,”; that Rolf uses the data to get an idea of what state revenues will look like.

The low point of new-vehicle sales may have occurred in December, study author Jeff Foltz said in the report.

“;After falling to about 2,600 units in December of 2009, the (three-month) moving average remained at about 2,700 units during the first six months of the year.”;

While part of the stabilization might be due to typically higher sales in the spring, “;it is an encouraging sign that the market is regaining some stability,”; Foltz said.

Rolf does not believe sales of 33,000 units is sustainable.

Some 55,000 cars each year are shredded, “;and if you're only selling around 33,000 cars a year on average, there is a pent-up demand building that will soon probably express itself in increased new-car sales.”;

Both Foltz and HADA believe the federal CARS program, commonly called Cash for Clunkers, will spur those sales, though their estimates differ slightly.

Foltz predicts 1,100 vehicles will be sold to buyers who trade in older vehicles for new, fuel-efficient models and receive a $3,500 or $4,500 credit toward the deal.

The program is projected to stimulate sales of 250,000 vehicles nationwide and HADA believes 800 to 1,000 of those purchases will be in Hawaii.

There are “;a plethora of credits for fuel-efficient vehicles”; that consumers can receive atop the CARS credit, in addition to other federal tax incentives, Rolf said.

In addition, Chrysler Group LLC announced yesterday it would match the CARS program with $4,500 cash or zero-percent financing for six years on most of its 2009 Chrysler, Dodge or Jeep models.