State auto sales flat, but expected to gain speed

Hawaii auto sales were virtually flat in the first quarter but are expected to accelerate and finish this year up 6.6% as consumers return to the market and dealers stock more vehicles on their lots.

The number of new-­vehicle registrations is also forecast to top 50,000 after falling below that level two of the previous three years, according to a report due out today from Hawaii Auto Outlook.

”During the past three years, the new vehicle market has been impacted by a series of speed bumps that have put the brakes on sales,” wrote Hawaii Auto Outlook Editor Jeffrey Foltz, who produces the quarterly report for the Hawaii Automobile Dealers Association. “The pandemic, supply chain issues, depleted inventories, rising interest rates, weakening consumer affordability, and concern over the banking system have pushed sales below trend levels.

“Despite this lengthy list, primary factors driving the market during 2023 are fairly evident. Following three years of below-average sales, pent-up demand is at elevated levels as the volume of postponed purchases continues to grow. Weakening consumer affordability will hold back the release of pent-up demand, but improving vehicle inventories should be sufficient to push sales above current levels.”

The 11,647 new-vehicle registrations last quarter inched up 0.7% from 11,569 in the year-earlier period. Toyota once again was the bestselling brand in the state with a 28.6% market share, followed by Honda at 10.4%, Tesla at 8.4%, Subaru at 6.4% and Nissan at 6.2%.

Electric vehicles continued to gain in popularity as they achieved a 13.2% market share in the first quarter, compared with 8.5% in the first quarter of 2022. Tesla dominated the battery electric vehicle market with a 63.3% market share — albeit down from its 73.3% market share in the year-earlier period. Nissan had the second­-largest market share during the first quarter at 6.1%.

Foltz is forecasting new- vehicle registrations to reach 50,950 this year, up from 47,781 in 2022. 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 DMV registrations.

Despite the slight statewide increase in registrations during the first quarter, Hawaii island was the only major market to show a gain with an increase of 14.9%. Oahu registrations slipped 1.4%, Maui registrations fell 1.9% and Kauai registrations declined 2.7%.

Light trucks, which include vans, SUVs and pickups, remained popular with a 75.4% market share during the first quarter with cars at a 24.6% market share.

“There are signs that the climb in light truck market share could be reaching its peak,” Foltz said. “Light trucks accounted for 49.7% of the market in 2012, and increased to 76.6% last year. In the first quarter of 2023, however, light truck share declined by 1.2 points versus a year earlier.”

The market share for the top-selling models in 2022 were To­yota Tacoma, 9.1%; Toyota 4Runner, 4.6%; Tesla Model Y, 4.5%; and the Toyota Corolla and To­yota RAV4, both at 3.9%.