New vehicle registrations were flat in the first quarter of this year, but light-truck sales rose strongly, according to a new Hawaii Auto Outlook report.
Auto sales are viewed by many as a harbinger of the economy, which the state Department of Business, Economic Development and Tourism said last week is growing at a slower pace than previously projected.
The 0.3 percent increase in statewide sales can be attributed, in part, to an 11.6 percent drop in vehicle registrations on Kauai and a 2 percent dip on Oahu, according to the report that was due to be publicly released Wednesday. That was somewhat offset by a 16.6 percent increase on Maui and a 4.8 percent gain on Hawaii island.
"We’ve got more inventory this year than we had last year," said Maui Toyota/Scion CEO Damien Farias Jr., explaining his part of the big increase in sales.
"Also, it’s the way we sell," he said, explaining that "we deal with everybody evenly. Everybody gets the best deal we can give them," whether customers are from Maui County or are making their purchases from another island via the Internet, he said.
The Maui-resident dealership owner is confident the second quarter also will be strong, given robust inventory and a sale marking the dealership’s 40th anniversary underway through the end of June.
Of the 13,219 vehicles that were registered statewide in the first three months of the year, 53.2 percent of them were light trucks, a 4.2 percent increase from the year-ago period.
The percentage of people favoring trucks over cars has grown over the last two-plus years with the spread during the first quarter of this year widening to 6.4 percentage points — 53.2 percent versus 46.8 percent, observed Dave Rolf, executive director of the Hawaii Automobile Dealers Association. That’s up from a 1.6 percentage-point spread for all of 2013 when 50.8 percent of the sales were trucks and 49.2 percent were cars.
The light-truck category generally is stronger on the neighbor islands.
"For every car I sell, I sell 2.5 trucks," Farias said.
The Toyota Tacoma continues to be Hawaii’s top-selling pickup truck, but not all vehicles in the light-truck category are pickup trucks. The figure includes vans and sport utility vehicles as well.
"It looks like lower gas prices, attractive financing, a booming construction industry and other factors have led to a greater number of trucks sold compared to the number of passenger cars," Rolf said.
Previously, light trucks dominated sales with 55.9 percent of the market in 2005 and 52.5 percent in 2008. The category subsequently saw smatterings of resurgences in the third quarter of 2010 and in 2011, which led up to light trucks’ current leading market share.
In the fourth quarter of 2009 amid the Great Recession, cars’ and light trucks’ market shares were even, according to Hawaii Auto Outlook. Car registrations at that time were up 12.2 percent over the same period in 2008, a significantly larger increase than the 7.3 percent increase for light trucks. Vehicle sales bottomed out by the end of 2010 at 32,649.
Hawaii vehicle registrations last quarter lagged the nationwide growth of 2.5 percent, whereas in the fourth quarter of 2014, Hawaii’s 18 percent sales growth dwarfed the mainland’s 6.6 percent figure.
As usual, Toyota was the top-selling brand overall in the first quarter with 25.2 percent of the Hawaii market, versus a 13.1 percent market share on the mainland.
Among domestic brands, Ford leads in Hawaii with 7.9 percent of the market, compared with 12.7 percent on the mainland.
Sales of alternative power train vehicles, such as electric and hybrid cars, appear to be trending downward, possibly due to lower gas prices. Through March of this year, 756 such vehicles were registered, versus 806 during the same period last year.
Overall, Hawaii Auto Outlook revised its sales projections for the year by 1.1 percent to 56,100 registrations, from the 56,700 projected in February. Still, the report is forecasting vehicle sales this year to rise 3.7 percent from the 54,095 sold last year.
A year ago Hawaii Auto Outlook reported that while sales were likely to move higher over the next two years, the market was showing signs of approaching its cyclical peak.