Volkswagen on Tuesday reported lower monthly U.S. sales for the first time in 2017 as July results trended down for most automakers.
Sales of the new Chattanooga-made Atlas sport utility vehicle fell in July from June's level as the company works out production and distribution issues, an analyst said.
"They're getting the kinks out," said Edmunds.com analyst Jessica Caldwell. "You don't see such wide variation month to month. Give them a few months to even itself out."
Atlas sales came in at 1,307 in July, down from 2,413 in June, according to Volkswagen of America.
The number of new cars and trucks titled in July in the county were nearly identical to a year ago:
* July 2017: 1,074
* July 2016: 1,071
Source: Hamilton County Clerk’s Office
Chattanooga plant spokesman Scott Wilson said the factory has resumed production after its normal summer shutdown in early July, and it's still in the middle of the ramp-up process.
"We have been working extra hours as needed throughout the ramp-up process, which is typical when introducing a new vehicle into production," he said. "We are thrilled that there is so much demand for the Atlas across America and everyone at the Chattanooga factory is working diligently to meet that demand while maintaining Volkswagen production standards."
The company's total July sales were 27,091 vehicles, down 5.8 percent from the same month a year ago. For the year, however, sales are 5.9 percent higher over the same period last year to 188,329, according to VW.
General Motors reported that sales fell 15 percent in July, while Ford's sales were down 7.5 percent. Both companies cut sales to rental and corporate fleets.
Fiat Chrysler's sales were down 10 percent. Nissan's sales fell 3 percent. Honda's sales were down 1.2 percent. At least two automakers bucked the trend. Toyota's sales rose 3.6 percent while Subaru's were up 7 percent.
Jack Nerad, Kelley Blue Book's executive market analyst, said July 2016 was a tough act to follow for automakers in what was one of the hottest sales months in history.
"As other economic indicators show increasing strength — consumer confidence, jobs growth, wage increases — the auto industry has been caught in a lull," he said.
Caldwell said the industry, which is coming off a record year in 2016, could choose to up incentives next month. That's a good time to do so because sales are usually higher at the end of the summer when the model year ends, she said.
"Sales could be higher in coming months," she said. "I don't think it will get to the record we saw last year."
Caldwell said she expects Atlas sales to do well moving ahead as the midsize SUV is in a segment that's selling.
"It will add incremental value for the brand," she said.
While the hot-selling VW Golf SportWagen posted an 87.4 percent jump to 2,103 vehicles in July, sales of the Chattanooga-made Passat dropped 21.5 percent to 5,143 vehicles.
The Passat, Caldwell said, is falling victim to what's affecting other sedans — a shift away from cars to SUVs and trucks.
She said the new Tiguan SUV, for which production is ramping up in Mexico, also should help VW sales in the remainder of 2017.
The Associated Press contributed to this story.
Contact Mike Pare at email@example.com or 423-757-6318.