New cars outsold trucks and sport utility vehicles by a 2-to-1 margin during the past couple of months in Hamilton County, a dramatic reversal from earlier in the year that is mirrored nationally amid high gasoline prices.
“That plays into our hands,” said Mark Barnes, Volkswagen Group of America’s chief operating officer.
The German automaker has a fuel-efficient lineup that is benefiting from the market’s shift to cars, he said. VW will increase that fleet when its new mid-size sedan comes off the assembly line at its planned Chattanooga plant sometime in late 2010 or early 2011, he added.
In the county, more than 2,000 new cars were sold in June and July, while half as many trucks and SUVs left dealer lots, according to data from the county clerk’s office. That’s a sharp shift from the first four months of the year, when trucks outsold cars each month.
David Hicks, Capital Toyota’s new-car sales manager, expects the move to cars will continue as long as gas prices stay up.
“We’ve got a year’s waiting list on the Prius,” he said of the Toyota hybrid car.
Thad Narramore, new-car sales manager at Marshal Mize Ford, said the automaker’s gas-sipping Focus is a strong seller in the high-priced-fuel environment. He said the dealer was the nation’s seventh largest seller of the Focus in May. Mr. Narramore said the dealership has got a 30-day supply of the car, though it’s even hard for the dealership to buy used Focuses.
“The prices are so high,” he said.
Volkswagen, in addition to its current stable of cars, has a handful of new launches this year to meet the market demand, Mr. Barnes said.
A clean diesel Jetta, a Jetta Sportswagen and a compact SUV are part of the company’s ambitious efforts to bring more vehicles to the United States and gain market share. A new version of the mid-size Passat sedan also is among the new products.
“We want to boost market share while the plant is constructed,” Mr. Barnes said about the $1 billion facility to go up at Enterprise South industrial park in Tyner.
Even though overall auto sales are down about 10 percent nationally, VW is up 1 percent in the United States so far this year, Mr. Barnes said. In addition, he said, the company’s market share is two-tenths of 1 percent higher this year.
“We’re bullish on what’s happening (with Volkswagen) right now,” Mr. Barnes said. “We’re positioned at the right time.”
Small cars represented 27 percent of vehicle sales industrywide in July, up from 21 percent in the same month last year, according to Ford Motor Co.
Toyota announced it is accelerating production of four-cylinder engines and boosting production of the subcompact Yaris and the small Corolla by 40,000 units through October.
Honda Motor Co. said it will adjust production of the hot-selling Civic, while GM is adding shifts to make the fast-selling Chevrolet Malibu and Cobalt cars. Ford is boosting production of the Focus.
Mr. Narramore said he thinks the market will readjust in time. People who need trucks are going to buy them, he said, but there will be fewer buyers of trucks who just want to drive them for fun.
The Associated Press contributed to this story.
Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...