Diesels help drive Volkswagen Passat sales

Diesels help drive Volkswagen Passat sales

June 4th, 2013 by Mike Pare in Business Around the Region

New Volkswagen Passats await transport outside of the Chattanooga assembly plant.

Photo by Dan Henry /Times Free Press.


New car and truck registrations in Hamilton County in May, year to date, and change:

• May 2013 - 1,037

• May 2012 - 1,069

• Change: down 2.9 percent

• Jan. to May 2013 - 5,178

• Jan. to May 2012 - 5,230

• Change: down 0.9 percent

Source: Hamilton County Clerk's Office


Volkswagen's May U.S. sales by model with change from a year ago:

• Golf - 3,052, down 21.3 percent

• Jetta - 15,910, up 4.8 percent

• Beetle - 3,718, up 23.9 percent

• Eos - 547, down 30.9 percent

• Passat sedan - 10,267, up O.9 percent

• CC - 1,294, down 19.5 percent

• Tiguan - 2,635, up 6.5 percent

• Touareg - 586, down 16.3 percent

• Total - 38,013, down 1.7 percent

Source: Volkswagen of America

The diesel Passat is made in Chattanooga.

The diesel Passat is made in Chattanooga.

Photo by Tim Barber /Times Free Press.

Raymond Holmes owned several diesel-powered vehicles a couple of decades ago, but he likes to drive a Town Car these days.

"Lincoln doesn't have a diesel," the Chattanooga motorist said Monday.

Volkswagen, however, has a handful of offerings with "clean diesel" engines, and the automaker reported its best May ever for sales of its TDI models in the United States.

VW sold more of its Chattanooga-made Passat cars last month than in any May, and diesels accounted for more than 31 percent of its 10,267 sales, the company reported.

Still, VW's total sales for May were off 1.7 percent as officials said the automaker is competing against sharp gains made a year ago. May 2012 sales had been up 26 percent from May 2011, according to VW.

All the major automakers posted sales hikes last month, with General Motors and Ford reporting among their best monthly figures since before the Great Recession.

Nissan sales jumped 25 percent in May over a year ago as the Japanese automaker cut prices on seven models.

For VW, its diesel models accounted for 22.3 percent of May U.S. sales.

Jonathan Browning, Volks-wagen Group of America's chief executive, said industry figures show that 72 percent of all diesel sales in the United States are VWs.

"In a month in which the industry saw strong growth in the pickup truck segments, an area in which we do not compete, we are pleased to see healthy consumer demand for our passenger cars, especially the growing demand for our TDI clean diesels and hybrid line-up," Browning said.

Diesel power

Ricky Smith of Al Johnson Volkswagen in Dalton, Ga., said he sees a lot of prospective Passat buyers who first drive the gas-powered version but then buy the diesel after comparing the two.

"It's so fuel efficient," said Smith about the diesel power Passat.

Even with diesel fuel prices about 50 cents more per gallon at the pump, Edmunds.com says a Passat TDI can save drivers about $230 a year versus a comparable gasoline-powered Passat.

Smith said the diesel Passat can go 795 miles on a full tank.

But, the diesel car also cost smore upfront. According to Edmunds, a Passat TDI SE with sunroof costs $2,320 more than a similarly equipped gasoline Passat.

Smith said the diesel is higher in price. Still, he said, there's the fuel savings, the automated manual transmission and environmentally friendly clean-burning engine in the diesel car.

"They have low-end torque and can pass anything on the interstate you want to pass," Smith added.

Other automakers with plants in Tennessee have noticed the upward trend of diesel sales.

General Motors this spring introduced a diesel-powered Chevrolet Cruze to compete with VW's Jetta.

The Cruze, GM's first U.S. diesel car in about three decades, has a 46 mpg highway rating, according to the automaker.

Officials at Tennessee's other carmaker, Nissan, are thinking about an efficient reduced-emissions diesel engine.

"Clean diesels work particularly well in Europe, but we're also seeing opportunities to bring clean diesels to other places around the world, and I don't exclude the United States," Andy Palmer, Nissan executive vice president in charge of global product planning, told Automotive News recently.

Economy impact

Overall strong auto sales continue to boost the U.S. economy, as consumers replace aging vehicles and businesses invest in trucks as they gain confidence, according to The Associated Press. Builders are buying pickup trucks at a rapid pace as home construction continues to rebound.

Ford said sales of its F-Series pickup -- the nation's best-selling vehicle -- hit 71,604, its highest sales since March 2007.

Chrysler Group said Ram pickup sales jumped 22 percent from last May to almost 32,000.

Chrysler's overall sales were up 11 percent on strong demand for the Ram and Jeep Grand Cherokee SUV. It was the company's best May sales in six years.

Toyota sales rose 2.5 percent in May to almost 208,000. The company said warmer weather and excellent Memorial Day sales drove up the total.

Analysts expected a strong May for the industry after a slightly disappointed April. They forecast a 7 percent increase over May 2012 to around 1.4 million vehicles, putting the industry back on pace for full-year sales of more than 15 million.

The Associated Press contributed to this story.

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