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.