published Saturday, August 2nd, 2014

New car, truck sales gain ground

NEW VEHICLES TITLED

July new car and truck registrations in Hamilton County over the past five years:

* 2014 - 1,162

* 2013 - 1,071

* 2012 - 1,076

* 2011 - 851

* 2010 - 740

Source: Hamilton County Clerk's Office

New car and truck sales in Hamilton County in July sped ahead of last year's mark for the third straight month.

The number of vehicles titled last month in the county rose nearly 8.5 percent over a year ago, matching the gain in sales nationally.

Most automakers with production plants in Tennessee posted higher U.S. sales in July. Nissan sales jumped 11.4 percent while General Motors' recorded a 9.4 percent increase.

Volkswagen sales, however, hit another pothole in July with a 14.6 percent drop. The Chattanooga-made Passat's sales fell 13.8 percent to 8,668, according to the German automaker.

Jesse Toprak, chief analyst for Cars.com, said VW lacks product in SUVs, and it doesn't offer a truck in the U.S.

"It's basically midsize and small cars -- two of the most hotly contested segments and the most crowded segment of all," he said. "VW is trying to stand out and having a hard time of it as the numbers show."

Akshay Anand, an analyst for Kelley Blue Book's KBB.com, noted that VW last month unveiled plans to build a new midsize sport utility vehicle in Chattanooga. The $600 million plant expansion is expected to create 2,000 more jobs in Chattanooga.

"New and redesigned [SUV] product will definitely be critical to helping the brand even though we're still a ways off from seeing the vehicles hit dealer lots," Anand said.

VW won't start production of new SUV based on the CrossBlue concept until late 2016.

In a bright spot for the German carmaker, its new Golf GTI continued its strong start with sales of 1,727 in July, up 39.7 percent over a year ago. Also, diesel sales across its models amounted to 23.1 percent of its monthly total.

Also Friday, VW said its global group production chief Michael Macht is quitting immediately. Thomas Ulbrich, head of production at the carmaker's main passenger-car brand, will take over duties from Macht on an interim basis until a successor is found, VW said in a statement.

Nationally, sales of SUVs in the U.S. over the first six months have outpaced those of sedans, according to market research firm IHS Inc. SUVs accounted for 36.5 percent of retail vehicle registrations. Four-door sedan sales were 35.4 percent, the company reported.

Overall, Toyota and Chrysler joined Nissan with double-digit percent sales gains in July over the same period last year.

New vehicle sales rose 9 percent to 1.4 million, according to Autodata Corp. It was the best July for the industry since 2006

Automakers typically offer deals in the summer to clear out inventory before cars from the new model year arrive in the fall. But July's discounts were unusually high.

Incentives rose 8 percent -- or $216 per vehicle -- over last July, according to Toprak. Incentives averaged $2,774 per vehicle, their highest level since August 2010. Toprak said Ford, Toyota, VW and Hyundai were the most generous; GM and Honda spent less.

Toyota was offering zero-percent financing on a five-year loan and $1,000 cash back on the Camry sedan. Ford offered $6,000 cash back on a new Expedition SUV. And Chrysler was peddling a $99 per month, two-year lease on a Dodge Dart.

Edmunds.com said 13.5 percent of new car loans in July had zero-percent financing, the highest level since December 2010.

John Felice, Ford's U.S. sales chief, said a slowing rate of sales growth will force automakers to get even more aggressive to steal sales away from competitors. That's already happening with small and midsize cars. For instance, buyers are paying an average of $1,000 less for a Ford Fusion sedan than they did a year ago, Felice said.

Overall, Felice said, buyers are still paying $800 more per vehicle than they did last year. That's because even with discounting, more people are choosing pricier SUVs and loading them up with features.

Based on July's sales, J.D. Power and Associates raised its forecast for full-year U.S. sales to 16.3 million vehicles. That's approaching the peak of 17 million set in 2005. Auto sales have led the uneven U.S. economic recovery, with sales increases of 1 million or more vehicles in each of the last four years. But that pace is slowing. U.S. sales totaled 15.6 million in 2013.

Chrysler saw the biggest gain in July, with sales up 20 percent to 140,102, led by the Ram pickup and the new Jeep Cherokee small SUV. Chrysler sold nearly 15,000 Cherokees, almost matching sales of the larger Grand Cherokee. Jeep sales rose 41 percent overall.

Toyota said its U.S. sales gained 11.6 percent to 215,802 on double-digit gains for the Camry and Corolla sedans and a 37 percent increase in sales of the newly redesigned RAV4.

The Associated Press contributed to this story.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.

about Mike Pare...

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 ...

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