Fiscal cliff could weigh on auto sales

Fiscal cliff could weigh on auto sales

December 4th, 2012 by Mike Pare in Business Around the Region

Rows of new Passats await delivery at the Chattanooga Volkswagen manufacturing plant at the Enterprise South industrial park.

Rows of new Passats await delivery at the...

Photo by John Rawlston /Times Free Press.


U.S. sales by company and percent gain over a year ago:

• Honda, up 39 percent

• Volkswagen, up 29.3 percent

• Toyota, up 17 percent

• Chrysler, up 14 percent

• Nissan, up 13 percent

• Hyundai, up 8 percent

• Ford, up 6.5 percent

• General Motors, up 3.4 percent

Source: MCT Information Services

Volkswagen had its best November in the U.S. in nearly 40 years last month, but worries the economy could drive off the fiscal cliff may hit December auto industry sales, experts said Monday.

Jonathan Browning, chief executive of Volkswagen Group of America, said he's expecting "a relatively strong" December, but federal budget talks could hinder consumer confidence.

"Discussions around the fiscal cliff have the potential to disrupt confidence," he said in a conference call with reporters and analysts.

Overall, VW's U.S. sales climbed 29.3 percent in November over a year ago to 36,728 last month, the company said.

Sales of the Chattanooga-made Passat have surpassed the 100,000 mark for the year, and the midsize sedan hit its best November mark ever with 10,544 units sold, according to the automaker.

Meanwhile, General Motors sales climbed 3.4 percent in November to 186,505, its highest U.S. sales volume for the month since 2007.

Danny Jackson of Walter Jackson Chevrolet in Ringgold, Ga., said that the faster the fiscal cliff issue is resolved, the better.

"The quicker we can get that settled and get it behind us, things will settle down," he said.

Jackson said sales were soft in November, but up over October. He said December started well with "a really good day Saturday."

Hyundai reported U.S. sales rose 8 percent to 53,487 vehicles. That was its top November since the brand entered the U.S. market more than 25 years ago.

Ken Rivera, sales manager for Long Hyundai in Chattanooga, also said uncertainly about the fiscal cliff could affect sales moving ahead. But, he added that uncertainty isn't anything new lately.

"We're sitting on a record-setting year," he said about Long Hyundai sales.


In Hamilton County, however, sales dropped in November for the first time this year compared to 2011.

New vehicle registrations were 877 last month, falling 7.7 percent from November 2011.

But for the year, Hamilton new car and truck titles are 14.7 percent above 2011, according to the county Clerk's Office.

American Honda Motor Co. reported sales jumped 39 percent in November compared with the same month last year, reaching 116,580 vehicles, an all-time record for the month.

"We are now surpassing sales records set pre-recession," said John Mendel, executive vice president of sales at American Honda.

VW sales for the year are 35 percent above the same period in 2011, according to VW. Browning said year-to-date sales of 394,128 are more than 100,000 units above last year.

For 2013, he said he's projecting steady growth rather than seeing a spectacular increase in sales.

Contact Mike Pare at or 423-757-6318.