LIHU‘E — The tides have turned for local car dealers.
While truck sales are starting to rebound, sales in general have dropped some 30 to 40 percent since the same time last year, according to auto dealerships across the island.
“It was horrible for a while, but in recent months, there’s been some light at the end of the tunnel,” said Garrett Tehero, owner of Kaua‘i Auto.
Sales aren’t booming as they once were five years ago, said Kuhio Motors general manager Michael Keppel, but business is better than it was during the months of October 2008 through February 2009, when it was “grim” for everyone.
“We made the adjustments, and since March, it has turned around dramatically,” he said. “We’ve had three great months in a row — not up to last year’s numbers — but we’re happy with the way business is going right now.”
“It’s a new reality,” he adds.
Ron Valencia, general sales manager of King Auto Center, said his team has been coping with the recession by becoming more conscious of the costs required to keep their business in motion.
“We’ve definitely been paying extra close attention to our expenses, making sure we’re spending our money wisely as far as things we need,” he said.
Since the beginning of the year, Valencia adds that business has been “fairly steady with some signs of moving up.”
The used car market is “brisk” right now, said Russell McCluskey, president of Ohana Motors, in an interview Thursday.
While sales are off for his business — dropping to an average of 46 cars sold per month from 86 per month prior to October 2008 — he suggested pre-owned vehicle sale trends are now on the rise.
“The general public is apprehensive about buying new cars,” he said. “Generally during a depression or recession, new car buyers tend to buy used, and used car buyers tend to buy parts.”
In fact, McCluskey said dealers are getting more involved in the used car business as inventory of pre-owned vehicles has significantly “dried up,” driving auction prices higher.
This especially holds true for used trucks, still a hot ticket item for kama‘aina, said Russell Wong, general manager of MidPac Auto Center.
“People are hanging on to them so they’re becoming harder to get,” he said.
Manufacturers have also downshifted to smaller sized vehicles, which has limited dealer access to trucks, he added.
When he can find them to sell, used trucks leave the lot fairly quickly. Adversely, new passenger truck purchases in the first six months of 2009 were off by about 37 percent compared to the same period in 2008, Wong said.
Keppel agrees that truck sales are strong even though inventory is down. In fact, 75 percent of Kuhio Motors’ vehicle transactions are trucks.
“It’s a neighbor island lifestyle,” he said, and added that people haven’t shied away from GM products, despite the American corporation’s financial circumstances.
On the other hand, Wong admits Ford products have gained “significant consideration” in recent months, as “they chose not to take any government bailout money.”
“The fact that Ford didn’t take any Federal money has benefited our operation to some degree,” he said Thursday.
Though sales are down, Kaua‘i car dealers have kept their spirits up.
“We’ve gone through a similar situation like this before on Kaua‘i and I believe Kaua‘i is pretty resilient and we will bounce back,” Valencia said.
“Anybody that’s in this industry is an eternal optimist,” Wong said. “I’m very positive that the economy will bounce back; the question is when.”
