Staff photo by Mike Pare / A sign at Village Volkswagen of Chattanooga tells people the auto dealership remains open during the coronavirus pandemic.

Tim Kelly says that meeting customer needs at his Chattanooga auto dealership while ensuring the safety of employees and patrons in the wake of the coronavirus is "a delicate balance."

"It has been tricky," says the owner of Kelly Subaru on Riverfront Parkway in Chattanooga.

Nationally, new vehicle sales were on a healthy pace until social distancing and other mandates were put into place amid COVID-19 in mid-March. For the month, nationwide sales fell by about 27% compared to March 2019, according to automotive research group Wards Intelligence.

But the Hamilton County Clerk's Office reported that new vehicles titled in March were up 9.2% over the same month a year ago, though some of that increase may have been February transactions recorded the following month.

In April and May, auto researcher J.D. Power is projecting national sales to go still lower.

Clay Watson, a partner in Mountain View Auto Group in Chattanooga, said Tuesday that sales are "decent" with incentives as good as he has seen in his 25 years in the business.

He said, for example, the auto group is seeing 0% interest for 72 to 84 months and no payment for 120 days.

"It's a good time to purchase a vehicle," said Watson.

According to J.D. Power, average incentive spending nationally in the last week of March hit a record $4,800 per vehicle and light-duty pickup incentive spending was a record $7,200 per vehicle.

Jason Williams, pre-owned sales manager for Long Mercedes, said the dealership sold about three to four vehicles a week lately.

"Last week was better, but weak," he said, adding that until restrictions on people's movements are lifted, he expects sales to be slower.

Kelly said the downtown Subaru dealership is selling "a couple of (vehicles) a day."

"Sales aren't nothing," he said, adding that the reason auto dealerships are considered essential businesses is that if a vehicle breaks down, it can be replaced.

How the dealerships are doing business is changing amid the coronavirus, the auto officials said.

Kelly said the Subaru dealership is working by appointment in the sales department, which he believes is working fine.

"The thing we've done is to limit showroom capacity," he said.

Employees over age 60 with pre-existing conditions were sent home if they wanted, Kelly said. Hours are shorter to provide time for more cleaning, he said. The service department has all the recommended safety protocols in place, Kelly said.

"Everyone is in rhythm and comfortable," he said.

Watson said the Mountain View group, one of the Chattanooga area's largest, is picking up customer vehicles for sales and service.

"We're figuring a new way of business," he said, with operations "going as well as expected given the challenges were faced with."

"We're concentrated on keeping people employed," he said. "We've changed our normal model of business. We're adapting to the shelter at home regulations and social distancing recommendations."

Watson said the group's drivers and some other staffers are splitting time doing extra cleaning in the high-traffic and high-touch areas.

Williams at Long Mercedes said the dealership is picking up cars from customers, which is a change from the past.

"People don't have to come down to the dealership or leave their house," he said.

Williams said personnel cover the seats, disinfect with spray, use floor mats, and wear gloves and masks.

"We're taking all the precautions," he said. "All the service is paid online. It's easy and convenient."

When it comes to test drives, dealership sales people aren't riding along, Williams said.

"Customers are riding alone," he said.

Moving ahead, Watson said he thinks the market will see a continuation of "really good incentives" even as people start returning to their jobs.

"I think incentives will stick around for a while to give people peace of mind," he said. "Everyone will not go back to work at once."

Once social distancing recommendations start to loosen and people stage their way back into a more normal way of life, dealers also will keep changing their way of doing business and accessing customers, Watson said.

Online sales like those used by retailers such as Carvana will become more popular among brick and mortar dealers, he said. Dealers will perfect that model and "we'll be one of those who does that," Watson said.

Contact Mike Pare at Follow him on Twitter @MikePareTFP.

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Staff photo by Mike Pare / Kelly Subaru on Riverfront Parkway is among auto dealerships taking new actions as it continues to sell vehicles amid the COVID-19 crisis.