Hawaii auto sales
take turn for better

Dealers hope this signals a
shift in the local economy

By Heather Tang
Star-Bulletin

Despite a stagnant local economy, retail sales of new cars and trucks in Hawaii jumped 9.2 percent during the second quarter of 1999.

A total of 11,795 vehicles were sold during the three months ended June 30, up from the year-earlier quarter's 10,802, according to figures prepared for the Hawaii Automobile Dealers Association.

Much of the quarter's gain came from import car and truck sales, which rose 19.5 percent to 6,809 from second quarter 1997's 5,700, HADA said. Sales of domestic models however, were down 2.3 percent during the second quarter to 4,986 from the year-earlier's 5,102.

For the first six months of this year, local car dealers sold 21,399 vehicles, a 4.3 percent rise from 20,524 during the first half of 1998, HADA said.

"This is awfully encouraging news for us as car dealers and for the economy in general," said David Rolf, HADA executive director.

"The economy has somewhat bottomed out, there's more of a positive attitude on the part of consumers. Dealers are reporting more people in showrooms and more car sales."

Rolf also noted that after eight years of weak auto sales in the state, the second-quarter jump is one of the most positive signs of economic recovery in nearly a decade. "We're upbeat about the direction of the future. Something very positive is happening, no one can deny it."

Total vehicle sales, including fleet sales, climbed 23.8 percent to 21,188 from the year-earlier figure of 17,118. Fleet sales generally represent new car registrations by rental car agencies but do not reflect sales to local consumers. This category has declined sharply in recent years as rental agencies retain vehicles much longer than previously.

The rise in auto sales is due to pent-up consumer demand for new autos as well as an increase in used car prices, said Eric Miyasaki, chief executive officer of Nissan Motor Corp. in Hawaii, which prepared the HADA report.

"A lot of people have put off purchases for a while or gone to less expensive used car purchases so this demand has been building for a while," Miyasaki said.

He expects a 5 percent increase in auto sales this year.

"I believe the economy has hit bottom. We'll see improvement from here on out," Miyasaki said.

"We're pretty bullish in our forecasts. Along with that, we have new products so we're even more optimistic. Generally speaking, the second half of the year is usually better than the first half, so the second half, even if it sustains current levels, will be ahead of last year."

Much of the quarterly increase was a result of truck sales, which have been growing in popularity nationally. Total second-quarter sales were up 30 percent; domestic truck models climbed 36.1 percent while foreign-made truck sales rose 17.6 percent.

Herman Jones, chief financial officer of the Cutter Automotive Team, the state's largest retailer, attributed the quarterly results to the increased number of new sports-utility vehicles available.

"Manufacturers are offering more SUVs so the consumer that formerly purchased a sedan now buys a SUV," said Jones. With the prevalence of the trendy vehicles on the market, he said, sales should continue to rise.