Auto sales to drop
after record year,
research says

Some 64,363 vehicles are projected
to sell this year, down from 2004

Auto sales in Hawaii are expected to fall 2.3 percent this year from 2004's record 65,882 new vehicle registrations, according to research for isle dealers.

The projections show 64,363 registrations for new autos this year, slightly down from last year but higher than the 62,712 recorded in 2003. New vehicle registrations in Hawaii last year were up 5.1 percent over 2003, at the same time national registrations increased by less than 1 percent.

The projections, based on research by Pennsylvania-based Auto Outlook Inc., are not necessarily shared by the Hawaii Automobile Dealers Association, which commissioned the research.

---

---

"We feel that in Hawaii ... growth will be sustained. I don't know that it'll be at the high level it's been since 2000, but the fundamentals are in place in the Hawaii economy to sustain good growth over the next decade. It could be a golden epoch," said Dave Rolf, executive director of the dealers association. "There are just so many things in place to have sustained growth throughout the entire economy and that usually means auto sales will keep pace with that."

Auto Outlook predicts domestic brands will take the largest hit in Hawaii, losing 5.5 percent of market share; that sales of European brands will drop 4.6 percent; and sales of Japanese brands will fall 0.6 percent.

But Korean-made vehicles will see growth of 2.2 percent in 2005.

"As market leaders, we see our market share steady or slightly increasing," said Curt Lee, general manager of Servco Automotive. The market share of Toyota, Servco's strongest brand, was 26.8 percent in January, according to R.L. Polk figures. Toyota consistently leads market share figures in Hawaii.

Import brands are stronger in Hawaii than domestic brands, which declined 1.7 points last year to 29.2 percent market share. Nationally, domestic brands fell to 53.5 percent of new sales, dipping 2.3 points from 2003.

Determining the reasons behind stronger import vs. domestic sales is an inexact science.

"If I could answer that, I could do some consulting for the Big Three in Detroit that would make me a very, very wealthy man," said Nick Cutter, president of Cutter Family Auto Centers.

"In some lines, the domestics here in Hawaii are doing better than the mainland market share," he said. "For example, sales of Ford pickup trucks here in the islands are better as a percentage than they are in other areas of the mainland."

Sales of the Chrysler 300C are up in both markets, but they are up less in Hawaii.

"Fewer of those cars are allocated to Hawaii. If we could get more, we could sell more," Cutter said.

Light trucks, which include pickup trucks up to large SUVs such as the Ford Excursion, are expected to gain market share in Hawaii and the mainland in 2005, as they did last year despite record gasoline prices.

Rolf remains upbeat.

"One out of every 5 nontourism retail dollars passes across the desks of 30 auto dealers," he said.