HawaiiDealer

The Official Publication of the Hawaii Automobile Dealers Association

2019 Convention Edition

HADA MEMBERS th CELEBRATE HADA’S 60 ON MAUI, THE ISLAND WITH “THE WORLD’S MOST SPECTACULAR SUNRISE!” (HADA Convention, October 10-13, 2019)

(See HADA’s Story Inside)

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Hawaii Automobile Dealers Association 1100 Alakea Street, Suite 2601 Honolulu, HI 96813 (808)593-0031 • Fax (808)593-0569

2019-2020 HADA Officers & Directors President John Uekawa President-Elect Kenny Ching Vice President Eric Fukunaga

“Let this edition be part of our sincere ‘Thank You’ to all our members who have helped HADA these past 60 years.”

Secretary Wayne De Luz Treasurer Bill van den Hurk NADA Director Stan Masamitsu Hawaii Director Joe Hanley Maui Director Jim Falk Kauai Director Mike Niethammer Oahu Director Stan Masamitsu Oahu Director

Please let this edition be part of a sincere “Thank You” to all our members, past and present, who have helped HADA serve our greater Hawaii community these past 60 years.

With the help of our local, state and national legislators and administration officials HADA has joined in the efforts to keep Hawaii moving with the mission of helping develop public policies that allow car buying and servicing, for the general public, to be trouble-free.

We also much appreciate the 4,429 employees in our new car dealerships and the 2,824 employees in related industries in Hawaii for your dedication and skills in selling and serving the more than one million light duty passenger cars and trucks on roads in Hawaii.

Much thanks to all for these great 60 years of HADA.

Michael Stoebner Oahu Director Heather Cutter Oahu Director Brad Nicolai

John Uekawa HADA President 2019, 2020

At-Large Director Marc Cutter At-Large Director Keoni Hansen Immediate Past President Brian Kitagawa

HADA STAFF Executive Director Dave Rolf

HawaiiDealer is designed & published by Custom Publishing Design Group, Inc.® 800.246.1637 • www.MyCompanyMagazine.com. To advertise in an upcoming issue contact Sara Russell, 800.246.1637 ext. 315 or e-mail sara@mycompanymagazine.com.

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

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HADA’s 60 Years (1959-

The (auto) industry “vitally a

—quote ta

1959

1959

STATEHOOD! (August 16, 1959)

1959

Early HADA members form a 501(c)6, non-profit trade association February 17, 1959.

is the year of car tail fins and Sputnik; and the 3-point seat belt is invented.

2000

First Hawaiian International Auto Show drew huge crowds

The Hawaii Convention Center is known as “one of the most beautiful convention centers in the world.”The show drew huge crowds extending for blocks…and continues as the busiest auto show among the 20 Motor Trend-produced auto shows across the country, as measured in crowd density per hour. The Hawaii show ranks high in the many show measurement categories measured by Motor Trend.

Walter Dods, Jr. (right), as Senior VP of Marketing of First Hawaiian Bank, founded the auto show in 1977. He is shown with HADA dealer Joe Nicolai who later helped move the show to the 200,000 square foot hall at the Hawaii Convention Center.

2000

HADA initiates and shepherds to legislative passage the “7 magic words bill” which established that auto dealers could provide loaner cars to their customers paid for under extended service contracts and established such contracts as warranty products not insurance products….also starting with this bill,major auto franchise bills were initiated by HADA every seven years starting in 2003, then 2010 and 2017, and were passed and signed into law.

10

-2019)

affects the general economy”

aken from the 1969 preamble to Hawaii Motor Vehicle Industry Licensing Act, Ch. 437

1959

1969

Hilo journalist Hardy Hutchinson begins his lobbying career which was to span forty years (1959-1999). Hardy served as HADA’s Manager and lobbyist during most of those years. Hardy used the title of “Manager” which was a title associated with the sugar industry on the island of Hawaii. He died May 6, 2003.

1999

HADA hires Rolf Advertising to contract-manage the association.

Hawaii’s Motor Vehicle Licensing Act becomes law, with the legislature finding and declaring, “The geographical location of Hawaii makes it necessary to ensure that motor vehicles, parts and dependable service are available within the State to protect and preserve the transportation system and the investments of its residents.”

1985

HADA supports adoption of mandatory seat belt law.

1977

First Hawaiian Bank’s then SVP of Marketing, Walter Dods, Jr., founds Oahu’s first auto show, with participation by 13 HADA dealers at the Blaisdell Arena and Exhibit Hall in ’77.

2001: A federal estate tax change, supported by HADA and co-sponsored by then Congressman Neil Abercrombie passed and was signed, preserving half-a-trillion dollars for family businesses.

At the time, in year 2000, Congressman Neil Abercombie said that the federal estate tax issue, which was preventing some family-owned businesses from being passed to the next generation, was not on his radar screen until NADA director, and HADA member Damien Farias visited his office and explained the story of how the estate tax affected family businesses, particularly in Hawaii. Congressman Abercrombie, responding to the HADA input subsequently helped bring dozens of fellow Democrats on to the bill to phase down the tax, which at the time was 55% of any estate value exceeding $675,000 per spouse. Largely because of the congressman’s efforts, the bill passed and was eventually signed into law…expanding the spousal exemptions to $3.5 million each. Today, continued modifications of the law have increased the exemptions to more than $11 million per spouse. Along the way, the accompanying gift tax was also modified…helping many dealers in facilitating the transfer of their family-owned dealerships to leadership by the next generation.

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2001

HADA’s “7 Cars for 7 Teachers” program provided cars (use for a year) for Hawaii’s District Teachers of the Year and the State Teacher of the Year.

During the previous year’s Department of Education Teacher of the Year awards program in 2000, HADA had coordinated a Hawaii Volkswagen ad group’s donation of a Jetta, (use for a year) for the state’s top teacher, and Superintendent of Schools Paul LaMehieu asked HADA dealers if they would be willing to provide vehicle prizes (use for a year) for all the District teacher winners also. HADA dealers responded with the “7 Cars for 7 Teachers” program which was continued until HADA reached its 50 years mark in 2009, with HADA dealers and dealer ad groups, and in one case the Association of Finance and Insurance Professionals, through 2008. In year 2001 Union 76 also provided gasoline for the winning teachers. The association returned to donating one car to the State Teacher of the Year, in 2009, our association’s 50th year—with the coordination of at the donation of the 50th car through the association. The HADA-coordinated car program for the State Teacher of the Year continues, with this year, 2019, marking the 60th car (use for a year) to be awarded to the State’s top teacher in the Department of Education’s annual awards program.

2003

The HADA-created “Wall of Words” was erected at the State Capitol on the Chamber Level, at the onset of the 2003 Legislative Session to support the curriculum bill.

The HADA Wall of Words exhibit was erected at the onset of the legislative year to support the rigorous curriculum efforts initiated by auto dealers to help with public school education. The legislators passed the HADA-supported testing bill that was designed to help with implementation of a rigorous content-oriented curriculum. The new testing however, was not implemented. The Honolulu Advertiser provided a full page to explain the efforts that Hawaii’s new car dealers were making in supporting awards for public school teachers and helping to bring in a rigorous curriculum for Hawaii’s public elementary schools.

12

HADA member and HADA vice president Eric Fukunaga, is shown with Senate education committee chair Norman Sakamoto at the HADA support for education exhibit that was erected at the start of the legislative session.

2002

HADA initiates “Teachers, Testing, and Textbooks” (a rigorous curriculum bill).

Following a request from a HADA dealer who had a six-figure new car warranty reimbursement claim rejected by an auto manufacturer because, according to the manufacturer’s officials, the write-ups submitted for the claims needed more clarity, HADA responded with an extensive program to improve the written communication skills of students. A world-recognized curriculum program was brought in for review, specialized testing was developed and new textbooks were examined. The testing program, in the form of H.B. 2353 was introduced and passed, but not implemented by the DOE, with lack of dedicated funding cited as the reason. The rigorous curriculum was not adopted statewide by DOE, but two elementary schools, Solomon Elementary and Kauluewela Elementary, which both had adopted the HADA-supported curriculum, moved from near the bottom of the rankings for school’s meeting standards, to near the top of the listing out of the 100 elementary schools in their category.

A HADA-created exhibit, with funding from Motor Tend Auto Shows, Inc., titled the “Wall of Words” was erected at the First Hawaiian International Auto Show to help the Department of Education present the concept to the public. The Honolulu Advertiser provided a page of advertorial copy to explain the program.

2002

HADA launches the HawaiiDealer magazine—the official publication of the Hawaii Automobile Dealers Association.

HADA president Charlie King had suggested that HADA establish a quarterly publication that would help in communicating HADA’s activities.

The HawaiiDealer magazine launched in 2002 and is sent not only to HADA members but local media, NADA directors in all 50 states, NADA officials, auto manufacturer officials, the 49 other state dealer association offices, and metro dealer association offices around the country, as well as sent to the Hawaii State Public Library for official-record purposes. Hawaii State Dealer of the Year Wayne De Luz featured on the first cover.

2002

“Wall of Words” HADA’s rigorous public school curriculum proposal was erected in a display at the First Hawaiian International Auto Show.

With the help of Motor Trend and staffing provided by the Department of Education along with State and District Teachers of the year, HADA erected the 5,500word “Wall of Words” exhibit at the First Hawaiian International Auto Show to present to the public a visual listing of a rigorous curriculum. Governor Linda Lingle was present at the VIP Preview Party and addressed the HADA members and guests with thanks for the association’s support for public education and teachers.

An early HADA invitation sent to President George W. Bush to speak at the VIP night had been supported in letters to the president by the governor, the Hawaii Board of Education, and Hawaii’s two congressmen, Ed Case and Neil Abercrombie. International tensions relating to the Middle East at the time made for difficulties in scheduling a presidential visit. President Bush, while governor of Texas, had earlier sent responses to requests from Hawaii relating to focusing on public education.

2003

Motor Vehicle Franchise Law is put back into Hawaii Revised Statutes.

The legislative action in the 1990’s which brought about a sunset (removal) of the Hawaii Motor Vehicle Franchise law as it applied to the licensing of auto manufacturers was put back into law after action by HADA in initiating the legislation. Then, Hawaii State Senator Ron Menor, was the primary sponsor of the legislation.

2003

HADADATA Hawaii Auto Outlook launches, providing accurate data on Hawaii’s auto industry.

13

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2003

AFIP Certification by 100% of new car dealerships is “First State in the Nation” to do so.

2005

Record High Registrations Light vehicle registrations reached a Hawaii state record of 70,268 new cars and trucks for 2005, later reaching a low of 32,649 in 2010 at the trailing end of the recession.

2007

HADA obtains help from U.S. Senator Daniel Inouye in separating car and truck mile-per-gallon CAFE standards.

On a trip to Washington D.C., HADA’s NADA director Joe Hanley and HADA executive director Dave Rolf visited with U.S. Senator Daniel Inouye who was chair of the Senate Commerce Committee. Joe, a Ford dealer, whose family had known and worked with the Senator for years, asked that car and truck standards remain separated because trucks had to provide the additional attributes of hauling and towing. Senator Inouye agreed to the request, and CAFE standards remained separated.

2008

“The Bloody Thorn” HADA initiates and secures passage of bill eliminating GET on new car warranty reimbursements to dealers.

In making the presentation to then Hawaii State Senate Ways and Means chair Rosalyn Baker, Dave Rolf pulled a bloodcovered thorn that his son had earlier stepped on and said “this is like the thorn that is in a Hawaii dealer’s foot because Hawaii is the only state that taxes dealers on reimbursements received for work to fulfill the manufacturers’ new car warranties. Senator Baker, moved the thorn aside from atop the bill and signed to move it forward…a key factor in eventual passage and relief for Hawaii dealers.

16

2005 New HADA website launches www.hawaiiautodealer.com.

2005

HADA dealer Mike McKenna is named AIADA National Dealer of the Year in Washington D.C. ceremony.

HADA member Mike McKenna, who had donated more than 25 free cars as door prizes for Hawaii high school Project Grad events over the years, and an additional $1 million to schools in $100 checks that equalled his new car sales numbers each year, was named the 2005 National Dealer of the Year by the American International Automobile Dealers Association during their annual meeting in Washington D.C. in 2005. Mike visited with members of the Hawaii congressional delegation on the Hill during his time in D.C. He is shown here with Hawaii U.S. Senator Daniel Inouye in the Senator’s D.C. office. Senator Inouye in later years played a key role, at HADA dealers’ request, in helping to extend the Cash For Clunkers program—to replace older vehicles with more fuel-efficient new vehicles. The Senator was chair of the Senate Appropriations Committee and helped obtain an additional $2 billion in federal funding for the program.

2006

HADA bill adds clarity to the law on negative equity on credit sale contracts.

In 2006, after Ford Motor Credit and others expressed concern that Hawaii was one of several states without specific language relating to negative equity on credit sale contracts, HADA worked with DCCA and state banking officials to draft and pass a law adding the language needed for clarity.

2008

Senator Inouye’s colloquy makes possible HADA’s “You Auto Buy Now” campaign.

On February 17, 2009 —coincidentally the exact day of HADA’s founding fifty years earlier— President Barrack Obama signed a bill exempting sales taxes on new car purchase on qualifying customers’ 2010 IRS tax returns, but it took a special colloquy on the floor of the U.S. arranged by Senator Inouye’s staff in conjunction with language provided by HADA and NADA to obtain an exemption for Hawaii’s new car customers because our state’s unique excise tax was not originally accounted for in the federal legislation. The Hawaii Association of Broadcasters (HAB), a HADA associate member organization, donated $375,000 in free airtime to HADA, and a commercial using George Segetti as spokesperson, explained the tax credit and advised “you auto buy now” to secure the tax credit.

17

Remembering HADA’s 50th Anniversa

HADA honorees, newly-elected HADA board members and dealer members of the association gathered Oct. 3, 2009 a four-foot cake decorated in the form of a 1959 pink Cadillac. Shown in the front row from left to right are: Damien Luz, Sr. Rab Guild, Ken Taylor, Brian Kitagawa and Tom Griffin. In the back row, from left to right are Frank Kudo, Ch Eric Fukunaga, Gary Wassel and James Hanley. Governor Linda Lingle (not shown), who was raised in a longtime car d 18

ary in 2009

at the J.W. Marriott Ihilani Resort and Spa to commemorate the 50th anniversary of the association by cutting a Farias, Jim Slemons, Morrie Stoebner, Nick Cutter, Dave Chun, Joe Nicolai, Tony Masamitsu, Gerald Cutter, David De harlie King, John Uekawa, Joe Hanley, Bill van den Hurk, Ron Hansen, Dennis Short, Wayne De Luz, Stan Masamitsu, dealer family, the Cutter family, gave the keynote address.

19

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2010

HADA initiates comprehensive franchise law update; a 54-page bill is signed into law.

In 2010, HADA initiated a comprehensive franchise law update that was introduced during the legislative session, passed unanimously through all committees and was signed into law, including in Hawaii’s Motor Vehicle Franchise Law a provision that requires manufacturers to pay retail rates for repairs done by a dealer to fulfill the manufacturer’s new car warranty requirements. All in all, there were 13 new provisions added into the law.

In 2011 ENERGY Becomes the Focus (because of CAFE Standards) 2012

Alan Karbousky explains “Perfect Storm” for Gifting.

In 2012 HADA invited prominent estate planning consultant Alan Karbousky to speak about what he described as the “Perfect Storm” for those who wished to take advantage of the developments around the year 2012 that provided excellent tax conditions for family businesses transitioning to new generational leadership.

22

2011

HADA provides a keynote address in Beijing at “the world’s largest EV show.”

2011

Lahaina Noon EV Press Conference Held.

With assistance from HADA, Peter Carlyle, mayor of the City and County of Honolulu, held a press conference next to Honolulu Hale in the city park containing Skygate, the sculpture by Isamu Noguchi which interacts with the sun when it is directly overhead at a time in Hawaii known as Lahaina Noon.

The mayor said that Hawaii offers a unique and favorable environment for electric vehicles. Six EVs were included in the display.

2011

APEC Display Created but Not Erected.

With the help of GES (the First Hawaiian International Auto Show decorator company hired by Motor Trend) which donated its design services to HADA, the association created a display for the 20 visiting economies represented at the 2011 Asia Pacific Economic Council (APEC) meeting held in Honolulu in 2011. HADA’s bid for the project, which included a proposal for a specially-produced video

by Edgy Lee, was not accepted, and a lower-priced bid for the display was accepted by the APEC committee. The entire exhibit would have included a 40-foot Cars & Energy display with interactive elements.

2011

HADA modifies Cars & Energy display for VIP Preview Night.

HADA modified the Cars & Energy display to a lower cost exhibit that was erected at the VIP Preview Night at the First Hawaiian International Auto Show. Then Lt. Governor Brian Schatz delivered remarks relating to Hawaii’s future and the future of renewable fuel vehicles.

2012

Honolulu Star-Advertiser Runs Full Front Page Story on EVs. HADA coordinated the provision of electric vehicles for reporter test drives and reports.

23

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job#:

19-CPB-024-036_HawaiiAutoDealer_Q2

client: Central Pacific Bank The Enterprise Way color: 4C size:

pub:

Hawaii Auto Dealer Magazine Q2 – July 29, 2019

issue date:

7.675” x 4.9”

Serving with Aloha in Hawaii since 1994.

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

25

2013

2014

Congresswoman Tulsi Gabbard signs on to H.R. 5403.

Congresswoman Colleen Hanabusa writes CFPB expressing concerns about the Bureau’s 2013 Guidance on dealer-assisted financing.

Following HADA’s request, Congresswoman Tulsi Gabbard also signed on as cosponsor of H.R. 5403 to rescind the CFPB’s 2013 Guidance on dealer-assisted financing and require a more transparent process in the future. The Guidance was eventually rescinded*.

*Both of Hawaii’s U.S. House members eventually voted against the measure to rescind in what was essentially a party-line vote, but their initial support was very helpful.

At HADA’s request, Congresswoman Colleen Hanabusa wrote the director of the Consumer Financial Protection Bureau to express concerns about the Bureau’s 2013 Guidance issued on dealer-assisted financing that threatened to eliminate the ability of dealers to discount the interest rate offered to customers who used dealerassisted financing for their vehicle purchases. Following HADA’s request for help, Congresswoman Hanabusa signed on as co-sponsor of H.R. 5403 that would rescind the 2013 Guidance and require CFPB to follow a transparent process when issuing any auto finance guidance.

2015

2017

HADA adds 6 provisions to Hawaii’s Motor Vehicle Franchise Law.

Hydrogen Car is Introduced at the First Hawaiian International Auto Show.

HADA added 6 new provisions to the state’s Motor Vehicle Franchise law, including a change that allowed dealers to transfer sales staff between dealerships that have common ownership, a provision that allows time for a dealer to recoup an investment for remodeling to meet manufacturer brand elements, a provision that provided dealers authority relating to customer data gathered in the sale and serving process, and a provision to require payment of 1% of the value of a vehicle grounded by safety recall call that was a manufacturer-ordered stop sell, if the recalled part was not made available in 30 days.

Free Papa John’s pizza is provided for attendees HADA has long said that America understands two things for sure: 1) cars and 2) pizzas. And if one wants to make a change in the country one is best advised to express that change in terms of one or the other or both. Servco Toyota introduced the hydrogen fuel cell electric car to Hawaii at the auto show on March 14, 2015—which happened to be “Pi Day” as in 3.14.15.

This exact day, interestingly and somewhat surprisingly, was accurately predicted in an HADA publication, published four years earlier in 2011.

2018

HADA and UH College of Engineering help form the Hawaii Autonomous Vehicle Institute.

2017

Gov. David Ige issues Exec. Order 17-07 stating Hawaii is “open for business” for R&D of autonomous vehicles

26

“e ala e” —

the Hawaiian phrase for sunrise characterizes HADA’s view of Hawaii’s future and the key role dealers will play in the adoption of new technology in vehicle guidance and propulsion.

300 Highrise Buildings

EV/AV Adoption Bridge Education/University Engineers

70,000

60,000

5G LTE

Transportation + Construction

50,000

40,000

30,000

20,000

10,000

0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 All Vehicles

E Vehicles

HAVS Highly Autonomous Vehicles

New Car & Truck Projections Thru 2045

Tourism/Conventions + Military

eiπ+ 1 = 0 Source: Hawaii Automobile Dealers Association. Note: Hydrogen fuel cell electric Vehicles are included in EV numbers.

HADA’s key roles in the bending of the curves…

On the Vehicle Fuel Efficiency (CAFE) Requirements by Year graph one can see where officials were considering one mpg standard for both cars and trucks—in the 2008 timeframe—when the two lines on the graph came nearer to each other. HADA’s request to keep the mpg requirement separated for cars and trucks has resulted in the continuation of the two CAFE standards. Trucks have attributes that require more power than many passenger vehicles. The increased mpg curve begins to bend upward around 2008.

HADA’s input to the Public Utilities Commission relating to the Hawaiian Electric Company’s “roadmap” to EV adoption shows HADA’s estimate of EV adoption and autonomous vehicle adoption, which is a bend in the adoption curve that is less than the sharp upward adoption curves estimated by HECO. HADA has proposed use of $3 million for an education-of-the-public campaign about the benefits of transitioning to renewable fuels. The money is proposed by HADA to be taken from the state’s Public Benefits Fund, which is a fund of around $30 million a year that is raised from the fee on each electric bill.

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Proud to have been serving our dealers for 15 years!

CU Direct partners with 71 dealers and 23 credit unions on five major Hawaiian Islands. Aloha Pacific FCU // Big Island FCU // Gather FCU Garden Island FCU // Hawaii Schools FCU // Hawaii State FCU // Hawaiian Financial FCU // Hawaii USA FCU // Hickam FCU // Honolulu FCU Honolulu Fire Department FCU // Kauai Government EFCU // Kauai Teachers FCU // Ko`olau FCU // Lana’i FCU // Matanuska Valley FCU // Maui County FCU Maui FCU // Oahu FCU // Operating Engineers FCU // Pearl Hawaii FCU // Pentagon FCU // University of Hawaii FCU // Valley Isle Community FCU

For more information, call Andrea Hussey-Leong at (808) 782-4960 or visit CUDL.com

Connect with

87%

of all online shoppers*

Your COMPLETE digital media, marketing, and deal-making solution.

Proud Supporters of HADA and the entire automotive community of Hawaii.

To learn more, please contact: Leah.Hookala@coxautoinc.com

*Source: 2017 Cox Automotive Car Buyer Journey Study; based on use of Autotrader, Kelley Blue Book, Dealer.com.

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

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

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Phone: (808)537-1970 Phone: (808)537-1970

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

Group Life and More!

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

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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.

YOU’RE GOING TO LOVE OUR 2019 MODEL.

On the roadways or the sea lanes, there’s no denying the importance of a top-of-the-line fleet.

The first of our two new Kanaloa Class con-ro vessels is coming in late 2019, as we begin to roll out a $500 million investment to better serve you, our friends and partners in Hawaii’s auto dealerships. We’ve been shipping automobiles to Hawaii for almost as long as there have been cars, and HADA members can continue to count on Matson to deliver. Visit Matson.com.