Hawaii automobile dealers are preparing for a difficult period as steep tariffs are expected to push vehicle prices higher and suppress sales across the islands. The latest Hawaii Auto Outlook report indicates new vehicle registrations are projected to decline further in the second half of 2025.
The state’s market had already shown signs of weakness earlier this year. New vehicle registrations fell by about 3% in the first six months of 2025 compared with the same period in 2024. This drop contrasts with the broader U.S. market, which posted an overall 6% gain during the same timeframe.
Melissa Pavlicek, executive director of the Hawaii Automobile Dealers Association, said the most recent figures reflect sales activity from the previous quarter and have not yet captured the full effect of the tariffs. “What it reflects is consumers’ perceptions, and because the announcement about tariffs has not just been on again, off again, but applicable to different vehicles and different manufacturers, it’s not settled yet,” Melissa Pavlicek told Island News.
The uncertainty in the industry has already influenced consumer sentiment, contributing to the slowdown. Industry analysts believe that the financial impact will become more evident in the coming months, with vehicle affordability posing a major challenge.
According to the Hawaii Auto Outlook, new registrations in the second half of the year are forecast to fall by 5.6%. For 2025 as a whole, the state’s auto market is projected to contract by about 4.5%, underscoring the challenges dealers have faced as tariffs reshape buyer behavior.
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