Page 1

The Official Publication of the Hawaii Automobile Dealers Association

2016 Convention Edition

At the 57th HADA Convention October 13-16, 2016 Grand Hyatt Kauai

KAUAI 2016

At the 2016 HADA convention you’ll be provided insights on the No. 1 word on top-selling dealer websites, p. 8 See President Bill van den Hurk’s comments, p. 4 See Hawaii Auto Outlook pages 20, 21, 22, and 23.

Also in this Edition...

Providing a Solution: Hawaii dealers met with Senator Brian Schatz to discuss S. 2663 — a solution to CFPB’s flawed guidance. page 11

Sponsors provide record $100,000-level of support for the HADA convention. page 4

Hawaii Forecast …remains positive. The Hawaii Auto Outlook provides numbers useful for planning. page 20


TOYOTA

DON’T TELL ME WE’RE JUST GOING FOR GROCERIES. When you get Hawaii’s favorite truck, you get more than a new ride. You get a lifestyle. The Tacoma is tougher and more refined than ever: • Bold New Look

SEE IT AT YOUR TOYOTA HAWAII DEALER!

• High-Strength, Alloy-Steel Construction • Quieter Ride • Available Touch Screen Display and Integrated Backup Camera

#LiveATruckLife

Whether its off-roading or making the next plate lunch run, Tacoma was built for the truck life.

Prototype shown with options. Actual model may vary.


HAWAII’S LARGEST LOCAL AUTO SITE Powered by

LIST YOUR VEHICLE INVENTORY TODAY • Safe, Easy & Secure • Thousands of local new, used and Certified Pre-Owned vehicles • Shop and compare for the best deals For listing and advertising information contact Darin Nakakura at dnakakura@staradvertiser.com


Hawaii Automobile Dealers Association 1100 Alakea Street, Suite 2601 Honolulu, HI 96813  ‡)D[  

2015-2016 HADA 2012-2013 OFFICERS & DIRECTORS PRESIDENT RESIDENT P Bill van den Hurk Mike Niethammer PRESIDENT RESIDENT-ELECT P -ELECT Brian Bill vanKitagawa den Hurk VICE ICE PRESIDENT V PRESIDENT Eric Fukunaga (ULF)XNXQDJD SECRETARY ECRETARY S Wayne DeLuz Joe Nicolai TREASURER REASURER T Kenny Ching John Uekawa NADA DIRECTOR NADA DIRECTOR Stan JoeMasamitsu Hanley HAWAII DIRECTOR HAWAII DIRECTOR Jackie De DeLuz Wayne Luz MAUI DIRECTOR MAUI DIRECTOR Damien Farias 'DPLHQ)DULDV OAHU DIRECTOR OAHU DIRECTOR Stan Masamitsu Stan Masamitsu OAHU DIRECTOR OAHU DIRECTOR Morrie Stoebner Morrie Stoebner OAHU DIRECTOR OAHU DIRECTOR NickJackson Cutter Jack OAHU DIRECTOR OAHU DIRECTOR Mark Benson Dan Keppel KAUAI DIRECTOR KAUAI DIRECTOR Dan Mackey AT LARGE DIRECTOR AT LARGE DIRECTOR Keoni Hansen Hansen Keoni AT LARGE DIRECTOR IMMEDIATE PAST PRESIDENT Marc Cutter Nick Cutter IMMEDIATE PAST PRESIDENT

HADA STAFF Mike Niethammer

It will be a joy to see everyone on Kauai at our annual HADA convention this year The HADA convention will be special this year. It will be a joy to see everyone on Kauai, Oct. 13-16. I look forward to providing a report on the progress of moving the ball forward with electronic vehicle registration (EVR). There’s more to be done, of course, to get used vehicles into this online process. Government officials need to allow third-party service companies to bring their expertise to the table. On national issues, we’ll hear from NADA’s chairman, Jeff Carlson, and NADA’s vice president of legislative affairs Michael Harrington. They will explain how HADA dealers, and our Hawaii congressional delegation, continue to play a key role in the CFPB issue, the safety recall issue, the CAFE standards and other issues that affect all dealerships nationwide. It has been a good year for the auto industry. During these good times we have moved to increase HADA dealer dues, bringing our dues in line with the national averages for state new car dealer associations. This was a good sense move, and one that will add stability if and when car sales aren’t as robust as they are right now. As I prepare to pass the HADA gavel on, I’d like to thank all our dealer members for your strong support of Dealer Day at the Capitol, your generous contributions to the HADA PAC and the NADA PAC, your wonderful and quick responses to AUTOCAP calls, your exceptional support of the KEEP HAWAII’S HEROES program, your help in seeking to reduce lines at DMVs through developing the EVR program, your support of the First Hawaiian International Auto Show, and most of all for the spirit of one for all and all for one that brings us all together at the annual HADA conventions. These conventions and the official publication of the association are made possible by the generous sponsor support of our associate members. Every member of the association knows and appreciates that fact. Sponsor support for the convention this year will exceed $100,000—a new record. I pass the gavel to Brian Kitagawa with the knowledge that 57 years of history means Brian will lead a strong association, focused on its mission: To help auto dealers comply with the laws, so as to make car buying, (and servicing), by the general public, trouble free. I want to personally thank Dave Rolf and his wife Sheri for making my 2 years as President of HADA look easy. Dave is relentless in his passion on behalf of HADA. His timeless hours involved in getting bills passed at the State Capital is greatly appreciated by many. Bill van den Hurk 2015, 2016 HADA president

([HFXWLYH'LUHFWRU

HADA DaveSTAFF Rolf EXECUTIVE DIRECTOR 'HDOHU6HUYLFHV0DQDJHU Dave Rolf *HRUJH&RFKDUG

HawaiiDealer is designed & published by Custom Publishing Design Group, Inc.® ‡ZZZ0\&RPSDQ\0DJD]LQHFRP7RDGYHUWLVHLQDQXSFRPLQJLVVXH FRQWDFW6DUD5XVVHOOH[WRUHPDLOVDUD#P\FRPSDQ\PDJD]LQHFRP

HawaiiDealer is published quarterly by the Hawaii Automobile Dealers Association, 1100 Alakea Street, Suite 2601, Honolulu, HI 96813 Phone: 808 593-0031 Fax: 808 593-0569 Email: drolf@hawaiidealer.com

4


F H B . C O M / Y E S

Don’t make them wait for that new car smell. Fast approvals Get customers into their new cars fast with our quick credit approvals and FRPSHWLWLYHUDWHV3DUWQHUZLWKXVDQGOHWȇVFKHFNRÎ?DOO\RXUPLOHVWRQHV together. It all starts with Yes. Call our Dealer Center at 844-3860.


KƵƌDŝƐƐŝŽŶ^ƚĂƚĞŵĞŶƚ͗

džƉĞĐƚĂƟŽŶƐ

ZĞƐƵůƚƐ

džĐĞĞĚĞĂůĞƌ͛ƐdžƉĞĐƚĂƟŽŶƐ͊ tĞWƌŽǀŝĚĞKƵƌĞĂůĞƌƐƚŚĞ,ŝŐŚĞƐƚWƌŽĮƚƐŝŶ,ĂǁĂŝŝ

&ŽƌDŽƌĞ/ŶĨŽƌŵĂƟŽŶŽŶƚĂĐƚ͗ Linda R. Fisher, President WŚŽŶĞ͗;ϳϭϰͿϲϭϮͲϲϭϳϲͻͲDĂŝů͗ůŝŶĚĂΛĚĞĂůĞƌĂƐƐƵƌĂŶĐĞŐƌŽƵƉ͘ĐŽŵ


CUSTOMERS SHAKE HANDS

FASTER WHEN THEY’RE IN GOOD HANDS The more confidence your customers have in your F&I products, the more deals you’ll close. So get Allstate Dealer Services. You’ll get 30 years of F&I expertise, a wealth of auto industry experience, and the incentives you need to make more money.

Call Rosalie J. Middleton from Western Insurance Hawaii to add Allstate to your product lineup.

808-722-5491 rosalie@westerninsurancehawaii.com rosaliej@hawaii.rr.com Allstate Dealer Services is a marketing name for Pablo Creek Services, Inc., ERJ Insurance Group, Inc. (d/b/a American Heritage Insurance Services), the dealer services division of American Heritage Life Insurance Company (Home Office:Jacksonville, FL), Northbrook Indemnity Company (Home Office: Northbrook, IL) and First Colonial Insurance Company (Home Office: Jacksonville, FL). Each of these entities is a member of the Allstate family of companies. © 2016 Allstate


The No. 1 word appearing on the nation’s top-selling dealership websites.

S

ome can remember Groucho Marx’s famous Secret Word Duck. On “You Bet Your Life” the duck would come down with a cash bonus if the contestant said the secret word. Recent research has determined that certain words on your website will result in cash to you and your sales staff. There are at least 10 magic words that result in cash according to the study of the nation's most successful dealership websites. The No. 1 magic word appearing on those websites is “provide.” At the HADA convention, one of our associate members will provide a confidential rating of your Hawaii dealership’s website. In a sealed envelope, after the General Meeting on Friday morning, you’ll receive a score on your website’s use of these words. Our generous associate members provide the sponsorship of our convention that allows for the joy, conviviality, and good business that always takes place on a beautiful neighbor island

8

when we get together. We’ll look forward to a good year in 2017, in which HADA will again provide AUTOCAP, HADA DATA, LOBBYING, PUBLIC RELATIONS, COORDINATION OF THE TEACHER OF THE YEAR FREE CAR (USE FOR A YEAR), FIRST HAWAIIAN AUTO SHOW COORDINATION, DEALER DAY AT THE CAPITOL COORDINATION, THE HAWAIIDEALER, HADA CONVENTION COORDINATION, THE HADA PAC, NADA PAC SOLICITATION, HAWAII AUTO TECH TRAINING (HATS) SCHOLARSHIPS, PUBLICATIONS AND WEBSITE, BOARD AND EXEC COMMITTEE COORDINATION, COORDINATION WITH OTHER ASSOCIATIONS, INCLUDING THE CHAMBER’S ALLIANCE, AND MORE. When dealers and associate members work together in partnership in this special industry, as is shown by the support of the HADA convention each year, it all works together to "provide" something that others, from around the country, find beautiful, baffling, and sublimely elegant: joy.


Our business is taking care of your business. At JM&A Group we understand how to run a business - large or small - where employees are treated as family. We know the importance of community service and giving back. And, we know that the bottom line is important too. That’s why we are here - in the islands - to help you with the best solutions for your business. We know the car business and the value of a unique culture. So, whether it’s in F&I, Sales or Service, our team of automotive professionals will help you maximize your store’s potential - all while maintaining that special, aloha spirit.

Call our local team

(800) 553-7146 Online at jmagroup.com

A division of

JM Family is a diversified automotive company ranked on the FORTUNE® 100 Best Companies to Work For® list, its eighteenth consecutive year. © 2016 Jim Moran and Associates, Inc.


Check in, even when you’re out. Leaving your desk shouldn’t leave you without access to PTWVY[HU[PUMVYTH[PVU;VY\UHWYVÄ[HISLKLHSLYZOPW`V\ need real-time reporting and a DMS that can supply it. As the only High Tech, High Touch+4:WYV]PKLY +LHSLY[YHJRVWLYH[LZPU[OLJSV\KLUHISPUN\ZLYZ[VHJJLZZ key dealership metrics from any location at any time. Call 888.645.4058 or visit dealertrack.com/dms to discover how you can do more with Dealertrack DMS.


The magic word when it comes to addressing CFPB: Transparency During a meeting with Senator Brian Schatz in his Honolulu offices, longtime HADA dealer member Nick Cutter, who years ago practiced law, summed the issue relating to the CFPB in one word: Transparency. Senator Schatz and Senator Mazie Hirono have been strong supporters of bipartisan solutions in government and strong supporters of transparency in government processes. HADA dealers are requesting their help in passing S. 2663. The bill this is summed below by NADA:

NATIONAL AUTOMOBILE DEALERS ASSOCIATION

HADA president Bill van den Hurk, left, and Nick Cutter, and Dave Rolf, not shown, met with Senator Brian Schatz, center, in the senator’s Honolulu office August 24, 2016 seeking, on behalf of HADA dealers, the senator’s support of S.2663 a bill that addresses the flawed data and shortcut processes used by CFPB in drafting their 2013 Guidance on dealer-assisted financing. The senator’s senior policy advisor, Dale Hahn is shown at right.

Senate Urged to Pass S. 2663 to Preserve Consumer Discounts on Auto Credit House Overwhelmingly Passed Companion Bill H.R. 1737 ISSUE The Consumer Financial Protection Bureau (CFPB) issued guidance that threatens to eliminate a dealer’s eligibility to offer consumers discounted auto loans. The CFPB is attempting to change the $1 trillion auto loan market and limit market competition without prior public comment, using flawed statistics, and without analyzing the impact of its guidance on consumers. Since the CFPB’s actions will raise credit costs for car buyers, the Senate should pass S. 2663, which would withdraw the CFPB’s flawed finance guidance and make the bureau more transparent and accountable when issuing future auto finance guidance. BACKGROUND Most car buyers choose to finance their purchases through indirect financing at dealerships. Dealers often discount an interest rate to “meet or beat” a competitor’s rate or meet a consumer’s budget needs. The CFPB’s 2013 guidance pressures finance sources to change the way they compensate dealers so as to eliminate or limit a dealer’s ability to discount credit for consumers. The CFPB’s new policy would limit market competition and needlessly deny many consumers a better interest rate. The CFPB is basing its policy on claims that discounted interest rates create a fair-credit risk. However, a nonpartisan study of the CFPB’s policy found that their methodology was prone to significant errors and ignored legitimate business factors that can affect finance rates (e.g. beating a competing rate). The CFPB knew of these flaws yet failed to correct them. Also, the auto industry has proposed a fair-credit compliance system based on a Department of Justice (DOJ) model that effectively manages fair-credit risk while preserving discounts on credit for legitimate business reasons such as consumer budget constraints. To date, the CFPB has declined to provide transparency regarding the auto finance guidance or a reasonable rationale for failing to adopt the effective DOJ fair-credit alternative.

In March, Sen. Jerry Moran (R-Kan.) introduced S. 2663, the Reforming CFPB Indirect Auto Financing Guidance Act, which would rescind the flawed auto finance guidance and allow the CFPB to reissue it under a transparent process. The House companion bill, H.R. 1737, was introduced by Reps. Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.) and garnered 167 co-sponsors (102 R, 65 D). H.R. 1737 passed the House Financial Services Committee by a vote of 47-10 on July 29, 2015, and passed the House by a vote of 332-96 (including 88 Democrats) on November 18, 2015. KEY POINTS UÊ S. 2663 simply requires the CFPB to follow a transparent process when issuing auto finance guidance. The CFPB’s 2013 auto finance guidance has a major impact on the auto loan market, yet was issued without prior notice, public comment or a hearing. This bill is intentionally narrow to address this problematic guidance. UÊ This bill protects fair-lending laws and enforcement to help safeguard equal opportunity in auto lending. S. 2663 is a process bill that provides the public with the opportunity to comment on the CFPB’s new policy, and does not change or impede the CFPB’s ability or authority to enforce any laws under its jurisdiction. UÊ The legislation is pro-consumer. The CFPB admits it did not study the impact of its guidance on consumers. Because of the adverse effect of the guidance on competition—and increased credit costs for consumers—the bill specifically requires the CFPB to consider the impact of new guidance on consumers. STATUS S. 2663 was referred to the Senate Banking Committee. The Committee held two hearings on the CFPB where support for protecting consumer affordability for auto loans was highlighted. On April 7, NADA submitted testimony to the committee supporting S. 2663. Senators should vote for S. 2663 to keep auto loans accessible and affordable. September 12, 2016

11


Easy!

Online HADA Convention Registration For Sponsorship, Convention, Hotel & Golf Visit www.HawaiiAutoDealer.com

Come to Kauai

. w h a n t r ’ s d a j u e a s t u p t h e ro L

The 57th HADA Convention October 13 -16, 2016

Grand Hyatt Kauai Resort and Spa Koloa, Kauai www.HawaiiAutoDealer.com


WE ARE PROUD TO BE SUPPORTERS OF HAWAII DEALERS AND HADA October 13-16, 2016 Koloa, Kauai


What’s just up the road for the Hawaii auto industry?

H

ADA’s Golden Gate Bridge graph (one can see the resemblance to the great bridge) back in 2010, when the graph was created, showed that the association predicted that motor vehicle registrations for 2016 would be about 57,500 new vehicles. Interestingly, Jeff Foltz, this year, indeed, estimates that new vehicle registrations will be 57,600, or just about what was predicted. Over the years, the new car sales have followed a pattern relative to the price of housing. When home prices were on the rise, new vehicle sales followed suit; when home prices leveled and stagnated, new vehicle sales retreated. It’s a cycle that repeats. Dealers have known about it for years. Over the last few decades, new vehicle sales have averaged about 50,000 a year. That 50,000 number, by the way, is approximately the number of vehicles taken out of service, crushed and sent off island each year. The red and blue bars represent the renewable fuel vehicle adoption rate that would be “needed” to meet the state goals for the Hawaii Clean Energy Initiative. In the transportation sector it appears that goal of 400,000 renewable fuel vehicles may turn out to be like California’s goals which are described as “laudable but unattainable.” HADA has projected that the likely number

would be closer to 40,000, still a significant number. A new development is the autonomous vehicles, which are arriving at light speed in automotive new product introduction terms. Some of these vehicles are projected to be on the roadways by 2021….just five years from now, and Ford Motor Company projects that, by 2030, 20% of all new vehicles sold will be fully autonomous—giving a meaning to the century-old term “automobile.”

Supporting Hawaii’s Auto Dealers Since 1992 Refer & Earn Earn a $10 gift card with each referral that receives a QUOTE! Call our dedicated dealership hotline: Mon - Fri 7:30am-5:00pm or Sat 9:00am-1:00pm.

DTRIC Drive Now™ Policy Get customers insured immediately with a guaranteed 30-day auto insurance policy for $230, convertible to a 6 or 12 month policy.

Great Customer Benefits With programs such as Deductible WipeOut™ and Home Auto Advantage customers save on protecting their new investments.

Refer and get a $10 Gift Card

791-1227

Neighbor Islands 1(877)791-9049 Toll Free | sales@DTRIC.com 14


Providing exceptional service for you and your clients.

MIKE WARING

WAYNE ARAKAKI

EDSON TOMA

Vice President & Manager Ph: 544-3731 Fax: 532-4200 michael.waring@centralpacificbank.com

Vice President, Dealer Center Ph: 544-5282 Fax: 532-4200 wayne.arakaki@centralpacificbank.com

Assistant Vice President, Dealer Center Ph: 544-5284 Fax: 532-4200 edson.toma@centralpacificbank.com

We have the loans that get your clients in your cars and out the door. Contact us today to see how our auto loans can work for you.

COMPETITIVE RATES

FLEXIBLE TERMS

0HPEHU)',&

QUICK LOAN APPROVALS

RESPONSIVE SERVICE

FHQWUDOSDFLÀFEDQNFRP

The Enterprise Way

Pick-up subject to geographic and other restrictions. ©2013 Enterprise Rent-A-Car E01923 11.13

15


The Era of the Recall

T

he “Year of the Recall,” 2014, saw auto manufacturers start exercising an abundance of caution following the General Motors ignition switch recall. Safety recalls during the two decades prior had stayed mostly under the 10 million annual range, but in 2014 safety recalls skyrocketed four-fold above the averages, with many recalls being uninfluenced, that is, issued by the automaker on its own. The massive Takata air bag safety recall is unlike anything seen to date by the auto industry. It has affected new and used car sales. According to a Honolulu Star-Advertiser story, the State of Hawaii became the first state to file a lawsuit against Japanese manufacturer Takata Corp. and Honda Motor Co., “alleging they intentionally sold cars that were made with dangerous air bags.” Steve Levins, executive director of the state Office of Consumer Protection, held a press conference in June about Takata’s faulty air bags. The state is urging consumers to check whether their vehicles are affected. NADA recommends that dealers run a check on the government website www.safercar.gov, which lists outstanding safety recalls on a specific vehicle by using a vehicle identification number (VIN) search online, and provide that information to the customer. Hawaii statutes address customer notification in HRS 481J-4: [§481J-4] Disclosure of damages or defects in used motor vehicles. (a) No dealer may offer for sale any used motor vehicle without first providing: 1. (1) Written notice to the prospective consumer of any material mechanical defect in the motor vehicle and any damage sustained by the motor vehicle due to fire, water, collision, or other causes for which the cost of repairs exceeds $1,000 for parts and labor, when the defect or damage is known to the dealer; and 2. (2) Written notice to the prospective consumer whether the dealer has conducted any inspection of the motor vehicle to determine known defects or damage. (b) If a dealer promises that any repairs will be made or any conditions corrected in connection with the purchase of a used motor vehicle, such promises shall be provided in writing and either attached or incorporated into the sales contract.

16

(c) For purposes of this section: "Known" means that a dealer or the dealer's agent or employee has obtained facts or information about the condition of a motor vehicle which would lead a reasonable person in similar circumstances to believe that the motor vehicle contained one or more material mechanical defects. The term "known" encompasses knowledge obtained through an inspection, from a previous owner, from the salesperson at an auction or another dealer, or through other means. "Material mechanical defect" means any defect or malfunction which renders the motor vehicle mechanically unsound or inoperable. Federal law requires a manufacturer to notify owners of their vehicles about safety recalls. The automakers use companies like Experian and IHS Automotive (formerly R.L. Polk Co.), who contract with state agencies in the 50 states to receive registered vehicle owner contact information, to provide the contact information for the mailings.

Recall Graph Source: National Highway Traffic and Safety Administration website


STREAMLINE FINANCING. ACCELERATE SALES. Reach more buyers, sell more cars and fund loans faster with CUDL and CUDL AutoSMART by CU Direct.

Point-of-Purchase Lending

Mobile & Online Auto Shopping

Q

Reach a nationwide network of 1,100 credit union lenders.

Q

Reach in-market credit union members.

Q

Access pre-approvals, get instant decisions on loans, and receive fast funding.

Q

Showcase your inventory on credit union websites and mobile devices.

Q

Simplify workow with two-way DMS integration.

Q

Share unlimited photos and technical speciďŹ cations for each vehicle.

Q

Drive revenue through backend products and at fee income.

Q

Free marketing materials and support.Â

Get started today! Call Andrea Hussey-Leong at 808.782.4960 or visit CUDIRECT.com Mahalo! CU Direct proudly serves 65 dealers and 22 credit unions on all four major Hawaiian islands: #'/* (&&-'#,0  3 ,'-+$ %%0  3 ('(%-%- #* )*,&',  +,-# (&&-'#,0 3-# (.*'&', 3 3%("#1 3#!+%' 3/## 3/##'% 3#$& 3/##"((%+ 3*%/##  -# (&&-'#,0 3-# 3'#.*+#,0( /## 3/## ',*% 3+,"- (&&-'#,0 3/##,, 3-# (-',0 3%%0+% (&&-'#,0 3('(%-%- 

17


Electric Vehicle DC Fast Charging Locations To support clean transportation, the Hawaiian Electric Companies offer publicly available DC Fast Chargers 2016

Hawai‘i Energy Policy Forum Clean Energy Transformational Achievement Award

Dole Plantation

Maui Electric Kahului Office Ko‘olau Center

Wai‘anae Mall COMING SOON

Hawaiian Electric Hawai‘i Kai 7-Eleven Ward Office

Kapolei Commons

Waimea COMING SOON

Hawai‘i Electric Light Hilo Office

O‘AHU LOCATIONS Dole Plantation 64-1550 Kamehameha Highway Hawaiian Electric - Ward Office 820 Ward Avenue Ko‘olau Center 47-388 Hui Iwa Street Kapolei Commons 4470 Kapolei Parkway Hawai‘i Kai 515 Pepeekeo Street Wai‘anae Mall 86-120 Farrington Highway COMING SOON

Hawai‘i Electric Light ce Kona Office

MAUI LOCATIONS Maui Electric - Kahului Office 210 W. Kamehameha Avenue

HAWAI‘I LOCATIONS Hawai‘i Electric Light - Hilo Office 1200 Kilauea Avenue Hawai‘i Electric Light - Kona Office 74-5519 Kaiwi Street Waimea COMING SOON

If you are interested in hosting a DC Fast Charging station at no cost, please contact us at goev@hawaiianelectric.com

www.hawaiianelectric.com/GoEVStations 18


LAW £ Hawaii F&I Library

Reynolds Document Services has developed a library of standard F&I documents designed to streamline processes, reduce potential liability, and provide common defenses for Hawaii dealers.

LAW£ — The Brand Hawaii Dealers Can Trust For more information, contact your Document Services Consultant Kyle Madison at 619.577.0527 or Kyle_Madison@reyrey.com.

800.344.0996 | LAW@reyrey.com

© 2016 The Reynolds and Reynolds Company. All rights reserved. Confidential and Proprietary Information. 9/16

19


Covering Data thru June 2016

Volume 15, Number 2

Hawaii Auto Outlook

Sponsored by: Hawaii Automobile Dealers Association FORECAST

State Market Up Less Than 2% in First Half of 2016 New retail registrations predicted to increase slightly for all of this year Information overload is hard to avoid these days. Here’s our attempt to cut through the clutter. Below is a concise summary of key trends and developments in the Hawaii new vehicle market. State market posts gain during first half of ‘16; increase is higher than U.S. State new retail registrations were up 1.8% for the first six months of this year versus a year earlier, above the marginal 0.6% uptick in the National market. New vehicle market was flat in Second Quarter of this year Registrations were essentially unchanged in the Second Quarter of this year, weaker than the 4.1% improvement in the First Quarter. Market may have reached sales peak in 2015; but don’t bet on it There are times when it’s relatively easy to discern what direction the new vehicle market is

headed in. When sales tumbled in 2009, everybody knew that there would be a recovery. And while many analysts were pessimistic that the market would return to the peaks reached in the 2000’s, Auto Outlook was confident that sales would return to those levels. Our regular review of key market predictors unambiguously indicated that the market had a very good chance to return to near record-high levels within about five years. But the outlook for where sales are headed over the next 12 to 18 months is cloudier. It’s great to be able to predict sales with certainty, but frankly, sometimes that’s just not possible. And that’s where we are right now. At this point, it looks like the market could increase marginally, or perhaps decline slightly this year and in 2017. But the impact of the Presidential election, fallout from Brexit, stagnant global economic growth, and the aggressiveness with which manufacturers will ratchet up incentives are all wild cards for the new vehicle market.

Annual Trend in State Market

New light vehicle registrations

60,000 57,094 54,039

40,000 42,463 30,000 20,000

57,600

48,705

32,878 32,649 35,576

10,000 0 2009

2010

2011

2012

2013

2014

2015

Tesla, Chevrolet, Audi, Buick, Honda, FIAT, GMC, Toyota, and Infiniti gain a lot of ground so far this year These nine brands had the largest percentage increases during the first six months of this year versus a year earlier. Registrations for each brand were up by more than 5% Toyota Tacoma and 4Runner are top sellers in state market Tacoma and 4Runner were at the top of the state sales chart so far this year. They were followed by Honda Civic, Honda, CR-V, Toyota Corolla, Toyota RAV4, Ford F-Series, Honda Accord, Toyota Camry, and Nissan Frontier.

Market Summary

70,000

50,000

Core fundamentals are pointing to another good year for sales this year and in 2017, but it’s basically a coin flip to decide whether sales will inch higher, or decline slightly.

2016 Forecast

TOTAL

YTD '15 thru June 27,863

YTD '16 % Chg. thru June '15 to '16 28,373 1.8%

Mkt. Share YTD '16

Car Light Truck

12,609 15,254

11,545 16,828

-8.4% 10.3%

40.7% 59.3%

Domestic European Japanese Korean

5,599 2,986 17,307 1,971

5,941 2,647 17,905 1,880

6.1% -11.4% 3.5% -4.6%

20.9% 9.3% 63.1% 6.6%

Historical Data Source: IHS Markit.

Source: IHS Markit.

The graph above shows annual new retail light vehicle registrations in the state from 2009 thru 2015 and Auto Outlook’s projection for 2016.

Domestic brands consists of vehicles sold by GM, Ford, FCA (excluding FIAT), and Tesla.


Hawaii Auto Outlook

Page 2

MARKET TRACKER: SEGMENTS

Pickup Segment Has Largest Gain Change in Segment Market Share

Pickup

YTD 2016 thru June vs. YTD 2015

Compact SUV Luxury SUV

Hawaii and U.S. Markets

Pickup market share was up sharply in the state market so far this year. Small Cars had the sharpest decline.

Mid Size SUV Van

Typical models in segments:

Full Size SUV

Small Car: Hyundai Elantra Mid Size & Large Car: Toyota Camry Luxury & Sports Car: BMW 3-Series Pickup: Ford F-Series Van: Honda Odyssey Compact SUV: Jeep Cherokee Mid Size SUV: Kia Sorento Full Size SUV: Chevrolet Tahoe Luxury SUV: Lexus RX

Mid Size and Large Car Hawaii US

Luxury and Sports Car Small Car -2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Change in market share

Source: IHS Markit.

MARKET TRACKER: STATE MARKET VERSUS U.S.

Hawaii Auto Outlook

Small Gains in Hawaii and U.S. State Market

U.S. Market

1.8%

0.6%

Passenger car market share YTD '16 thru June

40.7%

41.4%

Domestic brand market share YTD '16 thru June

20.9%

41.7%

Percent change in registrations YTD '16 thru June vs. YTD '15

Covering data thru June 2016 Published for: Hawaii Automobile Dealers Association 1100 Alakea Street, Suite 2601 Honolulu, HI 96813 Phone: 808-593-0031

Top 10 brands and market share YTD '16 thru June First

Toyota

28.0% Toyota

13.1%

Second

Honda

14.4% Ford

12.4%

Third

Nissan

10.3% Chevrolet

11.1%

Fourth

Ford

8.1% Honda

10.0%

Published by: Auto Outlook, Inc. PO Box 390 Exton, PA 19341 Phone: 800-206-0102 EMail: jfoltz@autooutlook.com Editor: Jeffrey A. Foltz

Fifth

Chevrolet

4.8% Nissan

7.5%

Sixth

Kia

4.0% Jeep

5.4%

Seventh

Lexus

2.9% Subaru

3.9%

Eighth

Subaru

2.9% Hyundai

3.9%

Reproduction, including photocopying of this publication in whole or in part, is prohibited without the express permission of Auto Outlook, Inc. Any material quoted must be attributed to Hawaii Auto Outlook, published by Auto Outlook, Inc. on behalf of the Hawaii Automobile Dealers Association, and must also include the statement: “Data Source: IHS Markit.” Unforeseen events may affect the forecast projections. Consequently, Auto Outlook is not responsible for management decisions based on the content of Hawaii Auto Outlook. Copyright Auto Outlook, Inc., September 2016

Ninth

Mazda

2.7% Kia

3.8%

Tenth

Hyundai

2.6% GMC

3.3%

Source: IHS Markit


Page 3

Hawaii Auto Outlook

BRAND SCOREBOARD - PART ONE

Toyota and Honda Are Market Share Leaders Toyota’s share of state market is 14.9 points higher than in U.S. The graph below provides a comparison of Hawaii and U.S. new retail market share during the first six months of this year for the top 10 selling brands in the state. Brands are positioned on the graph from top to bottom based on state market share. Hawaii and U.S. Market Share - YTD 2016 thru June Toyota

28.0%

13.1%

Honda

14.4%

10.0%

Nissan

10.3%

7.5% 8.1%

Ford 4.8%

Chevrolet Kia

4.0% 3.8%

Subaru

2.9% 3.9%

12.4%

Hawaii

11.1%

U.S.

2.9% 2.1%

Lexus Mazda

2.7% 1.9%

Hyundai

2.6%

0.0%

3.9% 5.0%

10.0%

15.0%

20.0%

30.0%

25.0%

Market Share

Data source: IHS Markit.

BRAND SCOREBOARD - PART TWO

Chevrolet Has Largest Percentage Gain Among Top Brands Chevrolet registrations were up by more than 25% in the first half of this year The graph below shows the percent change in new registrations during the first six months of this year versus a year earlier for the top 15 selling brands in the state. Chevrolet, Honda, and Toyota registrations were up by more than 5%. Percent Change in New Retail Light Vehicle Registrations - YTD ‘16 thru June vs. YTD ‘15 Chevrolet Honda Toyota Ford Ram Jeep Nissan Kia Mazda Subaru Lexus Mercedes Hyundai Dodge BMW -30.0%

25.4% 8.1% 5.5% 4.8% 4.8% 0.9% 0.6% 0.4% -1.7% -6.3% -6.9% -8.2% -11.4% -11.5% -22.0% -20.0%

-10.0%

0.0% Data source: IHS Markit.

10.0%

20.0%

30.0%


Page 4

Hawaii Auto Outlook

Hawaii New Retail Car and Light Truck Registrations Second Quarter 2015 and 2016 Registrations Market Share (%)

Year-to-date thru June for 2015 and 2016 Registrations Market Share (%)

2Q '15 14,716

2Q '16 14,692

% change -0.2

2Q '15

2Q '16

Change

YTD '15 27,863

YTD '16 28,373

% change 1.8

YTD '15

YTD '16

Change

Cars Light Trucks

6,474 8,242

5,845 8,847

-9.7 7.3

44.0 56.0

39.8 60.2

-4.2 4.2

12,609 15,254

11,545 16,828

-8.4 10.3

45.3 54.7

40.7 59.3

-4.6 4.6

Domestic Brands European Brands Japanese Brands Korean Brands

2,991 1,479 9,160 1,086

3,143 1,362 9,222 965

5.1 -7.9 0.7 -11.1

20.3 10.1 62.2 7.4

21.4 9.3 62.8 6.6

1.1 -0.8 0.6 -0.8

5,599 2,986 17,307 1,971

5,941 2,647 17,905 1,880

6.1 -11.4 3.5 -4.6

20.1 10.7 62.1 7.1

20.9 9.3 63.1 6.6

0.8 -1.4 1.0 -0.5

Acura Audi BMW Buick Cadillac Chevrolet C/D/J/R Total Chrysler Dodge Jeep Ram FIAT Ford GMC Honda Hyundai Infiniti Jaguar Kia Land Rover Lexus Lincoln Mazda Mercedes MINI Mitsubishi Nissan Other Porsche Subaru Tesla Toyota Volkswagen Volvo

179 114 426 47 40 594 921 58 318 359 186 27 1,162 167 1,935 458 64 12 628 51 450 23 392 323 143 37 1,423 29 66 469 36 4,209 266 25

201 156 368 40 30 709 882 65 266 362 189 19 1,232 165 2,158 383 64 15 582 38 418 11 421 344 128 29 1,448 25 51 390 72 4,092 187 34

12.3 36.8 -13.6 -14.9 -25.0 19.4 -4.2 12.1 -16.4 0.8 1.6 -29.6 6.0 -1.2 11.5 -16.4 0.0 25.0 -7.3 -25.5 -7.1 -52.2 7.4 6.5 -10.5 -21.6 1.8 -13.8 -22.7 -16.8 100.0 -2.8 -29.7 36.0

1.2 0.8 2.9 0.3 0.3 4.0 6.3 0.4 2.2 2.4 1.3 0.2 7.9 1.1 13.1 3.1 0.4 0.1 4.3 0.3 3.1 0.2 2.7 2.2 1.0 0.3 9.7 0.2 0.4 3.2 0.2 28.6 1.8 0.2

1.4 1.1 2.5 0.3 0.2 4.8 6.0 0.4 1.8 2.5 1.3 0.1 8.4 1.1 14.7 2.6 0.4 0.1 4.0 0.3 2.8 0.1 2.9 2.3 0.9 0.2 9.9 0.2 0.3 2.7 0.5 27.9 1.3 0.2

0.2 0.3 -0.4 0.0 -0.1 0.8 -0.3 0.0 -0.4 0.1 0.0 -0.1 0.5 0.0 1.6 -0.5 0.0 0.0 -0.3 0.0 -0.3 -0.1 0.2 0.1 -0.1 -0.1 0.2 0.0 -0.1 -0.5 0.3 -0.7 -0.5 0.0

375 232 902 79 84 1,086 1,748 115 592 687 354 51 2,196 274 3,773 835 121 27 1,136 90 882 46 776 708 285 69 2,893 59 113 876 84 7,539 467 57

370 275 704 88 56 1,362 1,701 113 524 693 371 55 2,302 293 4,078 740 127 22 1,140 92 821 23 763 650 244 62 2,911 48 111 821 114 7,951 368 81

-1.3 18.5 -22.0 11.4 -33.3 25.4 -2.7 -1.7 -11.5 0.9 4.8 7.8 4.8 6.9 8.1 -11.4 5.0 -18.5 0.4 2.2 -6.9 -50.0 -1.7 -8.2 -14.4 -10.1 0.6 -18.6 -1.8 -6.3 35.7 5.5 -21.2 42.1

1.3 0.8 3.2 0.3 0.3 3.9 6.3 0.4 2.1 2.5 1.3 0.2 7.9 1.0 13.5 3.0 0.4 0.1 4.1 0.3 3.2 0.2 2.8 2.5 1.0 0.2 10.4 0.2 0.4 3.1 0.3 27.1 1.7 0.2

TOTAL

1.3 0.0 1.0 0.2 2.5 -0.7 0.3 0.0 0.2 -0.1 4.8 0.9 6.0 -0.3 0.4 0.0 1.8 -0.3 2.4 -0.1 1.3 0.0 0.2 0.0 8.1 0.2 1.0 0.0 14.4 0.9 2.6 -0.4 0.4 0.0 0.1 0.0 4.0 -0.1 0.3 0.0 2.9 -0.3 0.1 -0.1 2.7 -0.1 2.3 -0.2 0.9 -0.1 0.2 0.0 10.3 -0.1 0.2 0.0 0.4 0.0 2.9 -0.2 0.4 0.1 28.0 0.9 1.3 -0.4 0.3 0.1 Source: IHS Markit.


They did it again! With the completion of the latest round of $),3&HUWLÂżFDWLRQWHVWLQJ Hawaii continues to lead the nation with the highest percentageRIÂżQDQFLDOVHUYLFHV personnel in franchised auto dealerships ZKRDUH$),3FHUWLÂżHGLQFRQVXPHUUHJXODWLRQV

Kudos for a job well done! The biggest winners? The car-buying public. The Association of Finance & Insurance Professionals ŞŗĹ?ÇŻĹšĹ˜ĹžÇŻĹ˜ĹšĹ™ĹšČąČąČŠČąČąÂŠÄ™Â™ÇŻÂŒÂ˜Â–ČąČąČŠČąČąÂ?ŠÂ&#x;Â’Â?ÇŻÂ›Â˜Â‹ÂŽÂ›Â?ÂœÂ˜Â—Č“ÂŠÄ™Â™ÇŻÂŒÂ˜Â–


Cavanah Associates represents the best Auto Dealer F&I products and services available for our Hawaii Auto Dealers. *H]HUHO(ZZVJPH[LZOHZHWYV\KOPZ[VY`VMWYV[LJ[PUNIV[OV\YJSPLU[ZHUK[OLPYLќLJ[Z >LILSPL]L[OH[WYV[LJ[PVUZOV\SKUV[VUS`ILWO`ZPJHSI\[HSZVÄUHUJPHS>LHPT[V WYV]PKL`V\^P[O[OLILZ[JV]LYHNLMVY[OLILZ[WYPJL

࠮ Business Insurance ࠮ Personal Insurance ࠮ Auto Dealership Services

Cavanah Associates is proud to represent

(SHRLH:[YLL[:\P[Lc/VUVS\S\/H^HPP c 


Your Dealership Compliance Management System (CMS)

Vendor Solution

Compliance Management System Establish Compliance Responsibilities Employee Training Review and Audit Corrective Action Consumer Compliants

compliantnow.com

Quarterly

Quarterly

Our solution integrates with Reynolds CRM, Route One, Dealertrack and ADP.


Protecting Our Customers' Assets Serving & Supporting Hawaii’s Auto Dealers Since 1976

Need Answers? www.HawaiiAutoDealer.com

YOUR HADA INFO RESOURCE

Cavanah Associates, Inc. An Independent Insurance Agency Specializing in:

A U T O M

O

H

A

E IL N

hada IO

E

Phone: (808)537-1970

Vehicle Service Contracts GAP Protection Programs Homeowners Insurance Personal Auto Insurance Dealer Enhancements Group Life and More!

II

D

Full Dealer Package Garage Liability Property Insurance Physical Damage Workers Compensation Employment Practices Liability

A

B

W

A

L

E

R

I A A S S O C

T

www.cavanah.com

growth engine Accelerating business performance with a range of financial solutions for Hawaii dealers. Rolf Sorenson | 310.990.5108 | rolf.w.sorenson@baml.com baml.com/dealerservices

The power of global connections

28


HADA associate members work with C&C of Honolulu’s DMV to address a problem

W

all Street Journal columnist Holman Jenkins, Jr. laments that government programs “cannot be changed no matter how maladaptive they are.” Indeed, Honolulu’s DMV, like many DMV systems around the country, with its legacy software, has proven to be maladaptive, unable to adjust to the need for speed in vehicle registrations. Its Cobol programming seems like it was born in the punch card days of computers. Change is difficult. HADA associate members from Manheim/Cox Automotive and TAGS met with City and County Honolulu’s DMV officials August 30, 2016. The first problem tackled? The weight algorithm in the City’s computer had a small variance with the weight on the vehicle’s hardcopy paperwork—the Manufacturer’s Certificate of Origin—the document some call the vehicle’s official birth certificate. So who cares if your bathroom scale is a little different from the one at the doctor’s office? Since some County and State vehicle taxes are based on the vehicle’s weight, it’s important to have consistency between all systems. The weights for the computer program were provided by a national third party data company and sometimes this data was delayed, causing a delay in the registration of the vehicle. Delays at DMV are something that both HADA and DMV officials want fixed.

L-R (counterclockwise) are Wayne Chow, with the C&C’s IT division, Donna Smallwood, HADA member and owner of TAGS, with DMV officials Randall Young, Bea Okami, administrator Galen Onouye, and Preston Ko. Ray Sperle, far right, and Greg LeLesch, center, of Manheim/Cox Automotive are a shown at August 30, 2016 meeting at the City and County of Honolulu’s DMV offices.

At the meeting, a solution to the weight problem was worked out. The good working relationship with HADA and DMV officials is starting to solve problems. Full, speedy online vehicle registration, and lien and title transfer is the big enchilada that remains an elusive goal—one that’s been out there for 16 years. Some states are moving to mandatory EVR and ELT –something that would affect both dealerships and financial institutions. So…. will this save Western Civilization Mr. Jenkins? We’d say, it’s a start.

29


Sponsors of the HawaiiDealer help HADA dealers fulfill the association’s mission. THE HADA Mission:

The Official Publication of the Hawaii Automobile Dealers Association

2015 Convention Edition

"To help auto dealers comply with the laws, to make car buying (and servicing) by the general public, trouble free.”

Maui au

The Official Publication of the Hawaii Automobile Dealers Association

Communications are key. Mahalo to all of the 25 sponsors of the official publication of the Hawaii Automobile Dealers Association.

2015 Summer Edition

Let’s Ride!

HADA Logs in on TPP

Here’s to a great 2017!

The Official Publication of the Hawaii Automobile Dealers Association

2016 1st Quarter Edition

The 56th HADA Convention s October 8-11, 2015 Fairmont Kea Lani s Wailea, Maui Other Stories in this Edition... tiio

Advertise In The HawaiiDealer

2015 Sales predicted to be up 4.3%

WORK IS GOOD UNDER THE HOOD

JOBS Surf’s (Sales’r) Up...

Established under HADA president Charlie King in 2002, the HawaiiDealer is a quarterly magazine that provides information on the activities of HADA members to a wide audience, including the membership of the Association, key employees at the dealerships, legislators, city council members, Hawaii media, the Congressional Delegation, and many Hawaii sister organizations.

The Official Publication of the Hawaii Automobile Dealers Association

2016 Summer Edition

THE EFFORTS TO GO

PAPERLESS

On the Trade Pact—Reserve Currency is the Key

Total Jobs are up, from 3,949 LY to

Other Edition... tiio 4,215 Stories TY (total,inallthis 75 dealerships)

HADA efforts to help the counties design and implement electronic vehicle registration are underway after SB233 passed.

Let’s Ride!

2015 First Hawaiian International Auto Show

Q: Will dealers operating in the blind bring down State Tax Revenues?

(Page 8) ™

Hawaii Auto Outlook 54,095 48,705 42,463

56,400

A: Yes

35,576 32,649

Register at www.hawaiiautodealer.com

Sales continue upward for 2015

Why Auto Dealers D Matter...

Kauai new car dealerships. Note: Kauai’s Grand Hyatt will be the site for the 2016 HADA convention.

see story on page 8

Hawaii’s show scores high on Motor Trend’s auto show benchmarks.

18

56th HADA Convention

Also Oct. in this Edition... 8-11, 2015 Fairmont Kea Lani, Maui

11

26

3.7% improvement predicted for the year

See Story Page 8.

Registered vehicle data, which has not been available for 10 months is now slowly starting to flow. See Hawaii Auto Outlook pages 20, 21, 22, and 23. 2016 First Hawaiian International Auto Show Sh how March 18-20,2016 page pag g e 1111

HADA H ADA deal dealers ers lunch with Bob ob b Lutz

Also in this Edition...

page 14

Bill van den Hurk greets Rep. Cynthia Theilen page 20 at Dealer Day at the Capitol.

HADA appreciates the “sponsorship” of the official publication through the provision of sixth, third, half, and full-page color messages. Mahalo!

HADA provides featured presentation for visiting Japan Auto Dealers Association page 14

For more information, Contact Custom Publishing Design Group, Inc. Tel 860-513-1213

„

Fax 860-513-1216

115

„

sara@MyCompanyMagazine.com

YEARS OF SERVICE TO OUR ISLANDS

HADA board discusses convention plans and other agenda items. See story on long lines at DMVs. page 27

Also see the HADA website at www.hawaiiautodealer.com

YOUNG BROTHERS is continuously exploring ways to enhance our services and provide quality customer service to our community.

See what we’re doing to provide more efficient inter-island shipping services by visiting: www.YoungBrothersHawaii.com

30

Come to Kauai. Learn what’s ahead for the auto industry at the HADA 57th Convention Oct. 13-16 page 12


From Ship to Showroom Pasha Hawaii offers Hawaii auto dealers and rental car companies versatile ocean transportation services between Hawaii and the Mainland, with fully enclosed decks on our roll-on/roll-off vessels for maximum protection of all vehicles. Direct Ro/Ro service available from Los Angeles and San Diego, CA to Hilo, Kahului, and Honolulu, HI.


In a word, we’re driven. For decades, Matson has supported Hawaii’s auto dealers as both a friend and partner. We have more sailings, more often, to and from Hawaii than any other carrier. The Hawaii Auto Dealers Association can rely on Matson to continue its proud tradition of providing regular, reliable delivery of automobiles and outstanding service, including up-to-date technology for vehicle status reporting and tracking. And after 130 years of service to the islands, members can continue to count on Matson to deliver.

For more information, call our Customer Support Center at (800) 4-MATSON or visit matson.com.

Profile for Traveler Media

HawaiiDealer  

2016 Q3 - Convention Edition of the official publication of HADA

HawaiiDealer  

2016 Q3 - Convention Edition of the official publication of HADA