Big Island auto sales suppressed by pandemic

  • Kelsey Walling/Tribune-Herald Sales consultant Bob Holcomb stands between two automobiles at Big Island Toyota in Hilo on Wednesday.

  • Kelsey Walling/Tribune-Herald Sales representative Chuck Paulino and sales manager Jaime Kerr stand by a new Ford Mustang at Orchid Isle Motors in Hilo on Wednesday.

Sales of new automobiles were down nearly 18% on the Big Island in 2020 compared to the year prior.

Statewide, sales were down 19.6% during the same period.

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That’s according to the Hawaii Auto Outlook recently released by the Hawaii Automobile Dealers Association.

According to the report’s market summary, 46,064 new automobiles were sold in Hawaii last year, down from 57,323 the previous year.

The forecast for 2020, which was released prior to the coronavirus pandemic, was for 56,300 new personal vehicles to be sold statewide. Pre-pandemic sales projections for 2021 were for 55,000 new vehicle sales. That forecast has been adjusted downward to 49,750 vehicles.

“Fifty-thousand new cars a year has long been a benchmark for the industry. That has been the average for the past 30 years,” Dave Rolf, HADA executive director, said Tuesday.

About 15,500 new vehicle purchases planned by consumers in 2020 and 2021 were expected to be postponed, according to the forecast.

That number represents about 30% of sales in an average year.

Light trucks continue to dominate Hawaii’s market, accounting for 33,163 vehicles sold in 2020, compared to 12,901 passenger cars sold.

“Three-quarters of the market share, when it comes to new vehicle sales, are in the truck category. And that’s because the light truck category includes pickup trucks, vans and SUVs — anything that’s built on a truck platform instead of a uni-body car platform,” Rolf said.

On the Big Island, 6,031 new automobiles were sold last year, compared to 7,348 in 2019, although the sales decrease of 17.9% was the smallest decline, percentage-wise, statewide.

“We sold a thousand cars less in 2020 than we did the year before. For us, here on the Big Island, that’s a huge, huge dip. We’re a little more optimistic for this year,” said Jackie De Luz Watanabe, president of Big Island Toyota and De Luz Chevrolet.

Toyota remained, far and away, the most popular make in the islands in 2020, with a 24.% share of the market. That’s 11.5% higher than its nearest competitor, Honda, at 13.3% of the statewide market.

Nissan occupies third place at 7.7%, with Ford a close fourth at 7.6%. In fifth place is Chrysler-Dodge-Jeep-Ram, with 6.6% of the market.

Rounding out the top 10 makes in Hawaii are: Chevy, 5.3%; Subaru, 4.6%; Tesla, 3.8%; Kia, 3.7%; and Hyundai, 3.1%.

Toyota’s dominance is even more pronounced on Hawaii Island, accounting for 29% of new vehicle sales in 2020. Honda was next with 12.8% percent, followed by Subaru at 8.8%, Nissan at 8.5%, Ford at 7.5% and Chevy, 7.2%

Toyota also has the islands’ four top-selling models — the Tacoma pickup truck with 7.6% of the market, the 4Runner and RAV4 SUVs, each at 3.9%, and the Corolla sedan at 3.2%

One obvious reason for the sales drop is the economic downturn caused by the pandemic, which put many people out of work. In December 2019, the statewide unemployment rate was just 2.7%. In November 2020, the rate was 10.4%, and the rate in December 2020 was 9.3%.

But the pandemic caused a hole in the automotive industry supply chain, as well, according to Rolf, especially the computer chips that control modern vehicles.

“The real story, as far as I’m concerned, is the inventory caused by COVID. And that hurt sales as much as anything,” he said. “When the chips for those vehicles weren’t available, the supply line got interrupted. And that’s because of COVID interrupting the factories in the supply lines around the world. So you ended up with shortages of inventory at almost every dealer. And that led to a lot of the decrease in sales. Vehicles just weren’t available.”

“Inventory’s probably been the biggest problem, I would say,” echoed Joe Hanley, president and CEO of Orchid Isle Auto Center, the island’s Ford dealership. “Shipping delays, product delays. … The shortage on chips. There are quite a bit of different areas at work that make it difficult to get a decent supply of vehicles to sell.”

De Luz Watanabe added that under current market conditions, “It doesn’t matter how much demand you have.”

“If the supplier has been shut down for awhile, to get that chain back up and going has been challenging,” De Luz Watanabe said. “Not only did the auto manufacturers slow down, so did the parts people and other vendors affecting car production and car repair.”

The pandemic moved a lot of the process of automobile purchasing online, except for the test drive and signing, which are usually still done in person. But dealers are ensuring their cars on the lot are fastidiously cleaned and sanitized.

“We’ve implemented the CDC and the state and county recommendations; we basically follow all the guidelines,” Hanley said.

According to Rolf, the manufacturing supply chain is gearing itself back up, “and that’s one reason we’ll be able to move up to a relative normal” by the end of the year.

De Luz Watanabe said with new car sales down, car owners took more of an interest in maintenance and repair of the vehicles they own, so “2020 wasn’t as bad as we thought it would be.”

“I’m cautiously optimistic about 2021, especially with the vaccine … and people getting back to work who want to work and our tourism industry opening up,” she said.

Hanley agreed that sales will pick up “as people get vaccinated.”

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“Everything ties back to tourism,” he said. “Once people get back to work, I think people will do their best to get back to normal, buying things and traveling.”

Email John Burnett at jburnett@hawaiitribune-herald.com.

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