Hawaii auto dealers can expect better sales in the coming year, but whether the increase will be robust or barely discernible depends on the source of the projection.

Pennsylvania-based Auto Outlook Inc. believes new-vehicle sales will rise by 9.7 percent to 36,900 from last year's 33,639, based on its review of major factors influencing new-vehicle purchases over the next 12 months.

A 3 percent increase is projected by the Hawaii Automobile Dealers Association, however.

The Hawaii association's projection factors in “;all the developments here with furloughs and the cutbacks,”; said Dave Rolf, HADA executive director.

“;Our own dealers have cut back from 5,000 (employees) to 4,000 in a single year.”;

Dealers believe that sales have finally bottomed out, but there might be some “;bumping along the bottom (while they are) trying to get some momentum,”; Rolf said.

Hawaii's 28 dealer-principals own 60 dealerships offering 135 franchises, including dealerships that sell multiple makes of vehicles.

The 3 percent bump would translate to about 1,000 more cars than were sold in 2009. “;Those additional 83 vehicles a month we anticipate for 2010 is not even one vehicle per franchise,”; he said.

New-vehicle sales hit a record of 70,268 in 2005 but have dropped 4.3 percent, 14.4 percent, 25.6 percent and 21.4 percent in successive years.

Last year's Cash for Clunkers federal vehicle purchase stimulus program “;helped at a very difficult time,”; Rolf said. “;It kind of rescued everybody and rejuvenated the industry,”; but once the program ended there was little “;glow”; and sales fell off quickly.

“;Dealers need to rehire, they want to rehire, but the sales projections are not enough to allow them to hire like they'd like to,”; Rolf said.

In the current retail market “;where the entire auto industry has been challenged, there's quite a bit of cost-shifting onto dealers from manufacturers, so dealers have to absorb more of the cost of selling vehicles.”;

A looming tenfold payroll tax increase could mean an additional one to two job cuts per dealership, said Rolf, after polling some HADA members at yesterday's Dealer Day at the state Legislature.

“;Hawaii really needs to empower the private sector to be able to rehire (workers), and that's what's facing everybody in a very challenging session,”; Rolf said.

The first half of the year will see a 14.5 percent jump in sales, while the rise in the second half will be smaller, at 5.1 percent, according to the Hawaii Auto Outlook report.

The more optimistic Pennsylvania study says pent-up demand for new vehicles is at record levels. It also cited a rebound in economic growth in the second half of last year as well as the strong affordability of new vehicles as factors in its projection.

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