VW sales down in May; Nissan and GM up

VW sales down in May; Nissan and GM up

June 4th, 2014 by Mike Pare in Business Around the Region

VW's new midsize SUV concept, called the Crossblue, was unveiled at the North American International Auto Show in Detroit in January 2013.

Photo by Mike Pare


Hamilton County new vehicle registrations rose in May over a year ago, though are off from pre-recession levels:

• 2014 - 1,075

• 2013 - 1,037

• 2012 - 1,069

• 2011 - 962

• 2010 - 834

• 2009 - 578

• 2008 - 1,373

• 2007 - 1,314

• 2006 - 1,242

• 2005 - 1,333

Source: Hamilton County Clerk's Office

An auto worker inspects finished SUVs coming off the assembly line at the General Motors auto plant in Arlington, Texas.

An auto worker inspects finished SUVs coming off...

Photo by Associated Press /Times Free Press.

May U.S. car sales chart.

May U.S. car sales chart.

Illustration by Laura McNutt /Times Free Press.

Sales for automakers with Tennessee assembly plants careened ahead in May, except for Volkswagen where its results slid even as the overall U.S. car market posted its best monthly total in nine years.

VW's limited offerings of sport utility vehicles and pickup trucks continue to hurt the company's namesake brand, though sister luxury nameplates Audi and Porsche reported their best May ever, the German car company said Tuesday.

The VW brand's May sales were off 15.4 percent from a year ago, as it had declines in its core Passat, Jetta and Golf vehicles. Chattanooga-made Passat sales fell 12.8 percent in May over the same month in 2013.

Jesse Toprak, chief analyst for Cars.com, said VW needs the new SUV that it's considering for its Chattanooga plant. He said that not only will the SUV improve sales in that segment, but there's "the halo effect" of people who go to a dealership looking at one product and leave with another.

"They need some sales momentum," Toprak said.

Nationwide, U.S. auto sales rose 11 percent to just over 1.6 million in May. That was the highest monthly total since July 2005, according to Kelley Blue Book.

The month is traditionally a strong one for the auto industry, as buyers spend their tax returns and think ahead to summer road trips. This year's calendar, with five weekends, gave it an extra boost.

Nissan and General Motors each recorded strong May gains in the U.S.

Sales at Nissan, which has an assembly plant in Smyrna, Tenn., jumped 18.8 percent on demand for new vehicles, including the Sentra small car and Rogue SUV.

"Nissan started the month with strong momentum and rode an outstanding Memorial Day weekend to capture our best May sales performance in the history of Nissan in the U.S.," said Fred Diaz, a Nissan senior vice president.

May also was the best-ever month for the electric Nissan LEAF with 3,117 units sold, an increase of 45.8 percent over the prior year. In May, LEAF passed 50,000 total U.S. sales since its launch. Altima sales set a May record at 36,053, up 12.9 percent, reported the automaker that has its U.S. headquarters in Franklin, Tenn.

GM, with a production plant in Spring Hill, Tenn., said May was its best month since August 2008 with a 13 percent increase. Sales of its GMC Yukon and Buick Encore SUVs more than doubled, and buyers snapped up the new Chevrolet Corvette. GMC Sierra pickup sales gained 14 percent.

Karl Brauer, a senior analyst with Kelley Blue Book, said buyers haven't been deterred by GM's multiple recalls - 13.8 million vehicles so far this year - and questions about how long the company took to report safety problems in older cars.

"Car buyers are willing to forget the past and look at the present and future for GM," he told The Associated Press.

In Hamilton County, the number of new vehicle registrations rose 3.6 percent in May compared to a year ago, according to the Clerk's Office. However, for the year, new cars titled in the county are down 1.5 percent, figures show.

Adam Ford, who said he's moving to Chattanooga from Kentucky, cited the economy has making him think twice about buying a new car.

VW Passat

VW Passat

Photo by Associated Press /Times Free Press.

"The way the economy is, I'd buy used," he said.

Meanwhile, Chrysler and Toyota reported double-digit sales gains in the U.S. over last May.

Ford's sales rose a better-than-expected 3 percent, while Hyundai's were up 4 percent.

Of major automakers, only the VW brand's sales fell.

Mark McNabb, chief operating officer for Volkwagen of America, said there was an increase in consumer traffic and closing rates over the last two weekends, but May ended as expected with the impact of certain models in run-out.

"With the launch of the much-anticipated Golf and Golf GTI, as well as the introduction of even more fuel efficient diesel engines in the Volkswagen line-up, we are confident we will broaden the appeal of our product portfolio as we head into summer," he said.

VW reported May sales of 32,163 vehicles, while Passat delivered 8,955 units in the month. For the year, VW sales are off 11.5 percent. Passat sales are down 5.9 percent, according to the automaker.

The Passat TDI, the only clean diesel in the midsize sedan segment, delivered 3,172 clean diesels in May, or 35.4 percent of total Passat sales, the company reported.

Bloomberg reported Tuesday that VW is considering tripling the brand's SUV lineup in a bid to overtake Toyota in global deliveries.

The VW marque will offer as many as six SUVs in the coming years, expanding from the midsize Touareg and compact Tiguan currently on sale, said the people, who asked not to be identified in advance of an official announcement.

Demand for SUVs is rising, with the models likely to account for 20.1 percent of global production by 2018 compared with 17.6 percent in 2012, according to consulting company PwC.

The Associated Press contributed to this story.

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