Fueled by the Chattanooga-made Passat, Volkswagen of America boosted sales last month by 12.7 percent over the same month a year ago.
Industrywide, U.S. buyers lured by Presidents Day deals snapped up pickups and SUVs in February, brightening what is usually a lackluster month for the auto industry.
Overall sales of new vehicles had been expected to fall slightly from last February as automakers cut back on deliveries to rental-car companies and other fleets. But some automakers performed better than industry analysts expected.
For Volkswagen of America, sales were up 14.75 percent to 48,655 vehicles over the first two months of 2017 as the German carmaker with a production plant in Chattanooga seeks to bounce back from its diesel-emission scandal.
Passat sales in February totaled 6,114 units, an increase of 39.6 percent over February 2016, the company said.
Tiguan SUV sales last month were 3,425 units, 5.5 percent over 2016, marking the best February ever for the vehicle, VW reported.
Across the industry, SUV and truck sales were surprisingly strong. Sales of the Chevrolet Silverado pickup jumped 17 percent from last February to more than 50,500 trucks, while Ford sold nearly 69,000 SUVs - a February record. Nissan said sales of its Rogue SUV jumped 54 percent.
General Motors and Nissan both saw 4 percent sales gains over last February. Volkswagen's sales were up 13 percent and Honda's sales were up 2 percent.
But not every automaker got a boost. Fiat Chrysler's sales fell 10 percent, hurt by declining sales of Jeeps. Toyota's sales dropped 7 percent. Ford's sales fell 4 percent.
Good deals reeled in buyers. Ford was offering $15,000 off on a 2016 Focus electric, while GM was offering zero-percent financing and up to $10,000 off certain GMC Sierra and Chevrolet Silverado pickups, according to car shopping site Autotrader.com. Buyers could get $5,000 off a Nissan Altima sedan.
Incentives per vehicle rose an estimated 13.5 percent to $3,443 last month, according to automotive forecasting firm ALG. GM was the biggest spender, at $4,547 per vehicle. Subaru spent the least, at $896 per vehicle, but Subaru's spending was up 61 percent over last February.
There were several reasons for the flurry of deals. After a seven-year stretch of sales increases - and record U.S. sales in 2016 - demand is starting to slow. Automakers want to hold on to their share of that market and avoid expensive cutbacks in auto production.
"It is taking more effort and more money to move the metal this year than last," said Michelle Krebs, a senior analyst with Autotrader.
Automakers are also spending more because vehicles cost more. Consumers are rapidly shifting out of cars and into SUVs and trucks, which cost more money. Kelley Blue Book said the price people paid for a vehicle last month was up 2 percent from last February to an average of $34,352.
The deals will likely continue in the coming months, says Alec Gutierrez, a senior market analyst with the car shopping site KBB.com. The industry has an 80-day supply of vehicles it needs to sell, which is about 20 days more than the level considered ideal.
Even if automakers cut production, the deals will ramp down slowly, because automakers lose buyers if they pull back too much.