Over 30 percent of October U.S. sales of the Chattanooga-made Passat were the clean diesel model, according to VW.
Amid the havoc of superstorm Sandy, two of the three automakers with plants in Tennessee posted higher U.S. sales in October over a year ago with Volkswagen reporting a 22 percent jump.
Jonathan Browning, Volkswagen Group of America's chief executive, said Thursday that 130 VW dealers, or 25 percent of its total, were affected by the end-of-the-month storm.
"It's a remarkable achievement by dealers across our network," Browning said in a conference call.
Overall U.S. sales for the automaker of 34,311 were highest for the month in 39 years, according to VW.
The 8,355 Chattanooga-made Passat sales figure was a new high for October, Browning said.
General Motors, with an assembly plant in Spring Hill, Tenn., said its U.S. sales last month were up 5 percent from a year ago to 195,764, the best October since 2007.
Dwight Morgan, general manager of Integrity Chevrolet in Chattanooga, said the new dealership that opened just three weeks ago had "a good month," citing its Malibu sedan, Equinox sport utility vehicle and Cruze compact.
Morgan said he is upbeat about the outlook for the Chapman Road dealership, adding he doesn't believe the November presidential election will impact sales.
Nissan, with an assembly plant in Smyrna, Tenn., reported sales slipped 3.2 percent in October over a year ago to 79,685.
Ken Hunt, owner of Hunt Nissan in Chattanooga, said its October sales were on par with last year and the dealership is up year over year.
He added he expects 2013 to turn in better sales than 2012.
Most of the major automakers reported sales increases in October despite losing at least three days of business to Sandy.
Chrysler predicted an annual sales rate of 14.7 million for the U.S. industry in October, making it one of the year's strongest months.
Toyota reported its sales rose almost 16 percent for the month. Honda sales were 8.8 percent higher, while Chrysler sales rose 10 percent.
At Ford, sales increased only 0.4 percent to 168,000 cars and trucks. The company said F-Series pickup trucks, the most popular vehicle in the nation, had their best October in eight years.
Industry analysts estimated the storm cut U.S. sales by about 20,000 cars and trucks in October as buyers hunkered down for the storm. But the Nissan brand, which gets 27 percent of its U.S. sales from the Northeast, was hit particularly hard.
"It is absolutely a hurt on us," said Al Castignetti, vice president of the Nissan division.
The Associated Press contributed to this report.