Hawaii made significant progress in the first quarter to distance itself from fossil fuels as the state reached double digits in electric vehicle registrations.
Those registrations, which include electric and plug-in hybrid vehicles, climbed to 10% as Tesla, Toyota and Lexus led the way. That performance placed Hawaii third nationally in the quarter behind only California (17.2%) and Washington state (10.7%).
Overall, though, it was a skewed quarter for auto sales as the number sold in the state rose 13.5% from the year-ago period largely due to lagging reporting a year ago due to COVID-19-related staffing issues and other factors that resulted in processing delays. The 13,626 new registrations in the first quarter were below the average total for the state and down 16% compared with the average first-quarter totals from 2016 through 2019. There were 12,001 in the first quarter of 2021 amid the processing delays.
Those delays also resulted in second- and third-quarter 2021 figures being inflated. As a result, registrations could fall by 20% or more in the second and third quarters of this year as tight inventories continue to be a factor, according to a report due out today from Hawaii Auto Outlook.
With inflation now at 40-year highs, new-vehicle affordability has taken a turn for the worse, according to Hawaii Auto Outlook Editor Jeffrey Foltz, who produces the report for the Hawaii Automobile Dealers Association.
“About 18 months ago, strong affordability was a primary ingredient contributing to the relatively upbeat outlook,” Foltz wrote. “Income growth was solid, interest rates were near 0%, inflation was under control, and transaction prices were relatively stable. Just about all of that has changed.
“Lean supplies have pushed prices significantly upward and higher interest rates are boosting monthly payments. Higher wages have helped, but monthly vehicle loan and lease costs as a percent of disposable income have moved higher during the past several months.”
Foltz’s baseline forecast for 2022 is for new light- vehicle registrations to slip 1.8% to 56,800, which would mark the fifth straight year that registrations fell below 60,000 units. Registrations jumped 25.6% to 57,851 in 2021.
“It’s beginning to sound like a broken record, but since the onset of the pandemic, there has been a great deal of uncertainty related to the forecast,” Foltz said. “Vehicle supply constraints and the war in Europe have added to the risks. One thing we do know: significant pent-up demand is accumulating which will provide a boost to sales in the coming years.”
Processing delays resulted in the state’s four markets posting increases during the January-March quarter as registrations rose 24.4% on Kauai, 16.5% on Oahu, 4.9% on Maui and 4.5% on Hawaii island.
New-vehicle registrations can be representative of auto sales, but the two don’t always align because a buyer can purchase a vehicle one month and register it in another month. The data is based on county Department of Motor Vehicles registrations.
Toyota was the bestselling brand in Hawaii during the first quarter with a 25.6% market share, followed by Honda at 10.3%, Nissan at 9.6%, Ford at 7.7% and Subaru at 5.8%.
The market share for the top-selling models in the first three months of the year were Toyota Tacoma, 5.8%; Toyota 4Runner, 5.7%; Toyota RAV4, 4.5%; Nissan Frontier, 3.5%; and Toyota Corolla, 3.0%.
