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Automobile Sale in Hawaii Fell 17% during Q1 of 2008
Jul 01, 2008

The automobile sale in Hawaii slumped 17% during first quarter of 2008 primarily due to rising inflation and fuel prices, lower wages and credit crunch.

Hawaii Auto Dealers Association (HADA) said in its latest edition of Auto Outlook that the new vehicles registration in Hawaii during first quarter of 2008 slumped by 17% to 11,921 compared to 14,431 registrations in the corresponding period last year, as reported by
BizJournals.

According to HADA, all the four islands of Hawaii saw decline in new vehicle registration but Oahu was the only island where fall was minimum just 14.8% to 8,360 against 9,811 during first quarter in 2007. On the contrary, the heaviest fall in new vehicle registration occurred on the Big Island by 26.3% to 1,496 against 2,031 in Q1 2007. Moreover, the sale of new light vehicles is likely to fall by 4.5% in the second half of 2008 against the same period last year whereas 9.7% slump is expected for 2008.

The new car sales are largely affected by tight credit facilities. Although it does not contribute substantially to the local economy, yet slowdown in its sale has an adverse impact on the state economy. Moreover, household debts also contributed to the slowdown in the sale of automobile industry during the first quarter 2008 as people were strongly pressurized by the drastic economic slowdown in the country.

Furthermore, rising inflation absorbed the liquidity of automobile industry in Hawaii as consumer spending is severely hit by low employment rate and poor wages. Spiraling fuel and gas prices nearly $4 a gallon is also accredited for low sale of fuel guzzling vehicles that generally constitute new car inventory.

In addition, auto dealers have reported that people are showing inclination towards hybrid fuel and small cars that consume less gas. Hence, to cope with present situation, automobile manufacturers are introducing new models with fuel efficiency to bring back the auto industry on track.

According to a research analyst at
RNCOS, “The Hawaii automobile industry is under pressure from slowdown in its economy. But introduction of new models that are too fuel-efficient would revitalize the auto industry to some extent. Moreover, the low cost of clean fuel will also help in reducing the pressure from Hawaii consumers.”

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