Hawaii automobile sales plunge as owners hang on to vehicles
Hawaii vehicle owners are keeping their trucks and cars longer than ever as expectations have diminished that the local market will see a significant rise in sales this year.
Sales are now projected to gain just 1.1% in 2024 versus a first-quarter annual forecast of 3.7%, according to a second-quarter report released recently from Hawaii Auto Outlook.
The dismal outlook comes after new-vehicle registrations plunged 11.8% in the second quarter to bring the midyear decline to 7%. By contrast, national auto sales were up 3.4% through the first six months.
One of the primary reasons for the downturn is that the average age of vehicles in the state has reached an all-time high of 12-1/2 years as owners remain reluctant to upgrade their trucks and cars amid elevated finance and lease costs due to higher interest rates. Also contributing to the decline in sales is waning consumer confidence because of the uncertainty of the presidential election, and geopolitical unrest surrounding the Ukraine-Russia and Middle East conflicts, the report said.
“Right now, affordability is a deterrent for new vehicle sales, but increased inventories and rising incentives have pushed down vehicle prices, which will spur demand,” Jeffrey Foltz, editor of Hawaii Auto Outlook, wrote in the report, which is produced for the Hawaii Automobile Dealers Association.
“Replacement demand and falling transaction prices will provide some momentum for the new vehicle market for the rest of ’24, while the negative factors will limit growth,” Foltz added. “Despite the 7% decline in the first half of ’24, the market still has a chance to post a small improvement for all of this year vs. 2023.”
New-vehicle registrations are now forecast to hit 47,100, down from a forecast of 48,300 after the first quarter. A positive year would represent the first increase in annual sales after two consecutive down years. Through the first half of the year, statewide registrations were 22,670, down from 24,373 in the year-earlier period.
It was a disappointing first half of the year among the islands as registrations plunged 17.8% on Kauai, 11.9% on Hawaii island, 5.6% on Oahu and 3.4% on Maui.
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. The data is based on county Department of Motor Vehicles registrations.
Toyota was the bestselling brand through the fix six months with a 27.5% market share, followed by Honda at 13.6%, Tesla at 7.6%, Ford at 6.5% and Nissan at 6.3%.
The market share for the top-selling models in the state through the first six months were Toyota Tacoma, 6.3%; Tesla Model Y, 5.9%; Toyota 4Runner, 4.6%; Toyota RAV4, 4.4%; and Toyota Corolla, 3.6%.
Alternative powertrain vehicles continued to gain in popularity as the state continues its transition away from fossil fuels.
Battery electric vehicle registrations in the state had a 14% market share through the first six months versus 13.5% a year earlier.
Hybrid vehicles encompassed 10.7% of the market share in the first half of the year, compared with 7.4% in the year-earlier time frame. Plug-in hybrids’ market share was 2.1%, compared with 1.5%.
However, the market share in all three categories leveled off as they fell from the first three months of the year.
Light trucks — which include vans, SUVs and pickups — maintained their large lead over cars with a 77% market share versus 23% for cars. Consumers continue to opt for larger vehicles because of more visibility, additional room for storage and stable gas prices.
