This story was updated Friday, Jan. 3, 2020, at 8 p.m. with more information.
Chattanoogans are increasingly falling in love with new trucks — or at least Sport Utility Vehicles and crossover vehicles built on truck chassis.
New car buyers shifting to trucks and SUVs pushed up the number of new trucks registered in Hamilton County last year by 14.8% to a record high of 9,297 trucks. Truck sales comprised 71% of all new vehicle purchases at Chattanooga dealers in 2019, as truck sales rose but sales of cars and sedans fell by 5.8% last year to 3,797 cars.
The number of new cars sold in Hamilton County last year was the lowest in modern history, dropping to less than a fourth of the peak year in 1973 when local dealers sold 15,698 new cars and cars outsold trucks by nearly a 5-to-1 ratio.
Of course, what constitutes a truck if far different today than the pickup trucks of a generation ago. The emergence of SUVs and crossovers offering versatile seating, a higher stance and hauling capabilities have supplanted many of the station wagons, mini vans and larger sedans of the past.
"We see cars being traded in for SUVs every day and I think that trend is going to continue," said Steve Marlin, general manager for Kelly Subaru in Chattanooga which enjoyed higher sales boosted by the popularity of the Subaru Outback last year. "People like the versatility of an SUV and they offer gas mileage and a comfort and ease of driving that is far different than trucks used to have a generation ago."
Bradley Cobb, president of the Bowers Automotive Group in Chattanooga which owns Volkswagen, Toyota, Honda, Kia, Audi and Hyundai dealerships in Tennessee and Georgia, said cheaper gas prices initially helped propel SUV sales but improved vehicle mileage has sustained the trend toward larger vehicles.
"Chattanooga is definitely an outdoor-oriented city and SUVs and crossovers are well suited to that active lifestyle," Cobb said. "I do not think 4-door sedan is going away, but people are more attracted to versatility that SUVs and trucks offer."
Ford, General Motors and even Volkswagen discontinued some of their car models in 2019 in favor of building more trucks and SUVs.
Following a long trend, 69% of new vehicles sold nationwide last year were trucks or SUVs, with truck sales up 2.6% from a year ago. Car sales fell once again, by 10.1%, according to Autodata Corp.
For Volkswagen of America, which builds cars and trucks for the U.S. market in Chattanooga, the shift to SUVs helped keep VW sales up in 2019 despite an overall decline in U.S. vehicle sales in 2019 estimated at about 1.3%, according to Cox Automotive and J.D. Power/LMC Automotive.
Sales of the Chattanooga-made Atlas led VW's sales gains last year. The Atlas models, which added the popular 5-seat Atlas Cross Sport SUV in March, grew by 37% from 59,677 vehicles sold in 2018 to 81,508 vehicles sold in 2019. VW's Tiguan sales also rose 22% last year.
"Double digit growth for our SUV's allowed us to outpace the market throughout 2019," said Werner Eachhorn, chief sales and marketing officer for the VW North American Region. "We're excited to build on that demand with the Atlas Cross Sport this year."
In contrast to the jump in SUV sales, VW reported a 66% drop in sales of the Chattanooga-made Passat last year, falling from 41,401 cars in 2018 to only 14,123 cars in 2019.
Overall, sutomakers sold 17.05 million new cars, trucks and SUVs in 2019. Both Marlin and Cobb said they are optimistic about 2020 vehcile sales even after strong sales over the past couple of years.
Although buyers spent more on vehicles, companies had to prop up sales with record discounts, according to analysts.
Sales at General Motors fell 2.5% for the year as a 40-day strike by the United Auto Workers union cut into inventories in the fourth quarter. Ford sales fell 3.2%, while Fiat Chrysler sales dropped 1.4%. Sales at Toyota fell 1.8% and Nissan sales tumbled almost 10%.
The Edmunds.com auto pricing site predicted that more than half the new vehicles sold last year were SUVs, passing 50% market share for the first time.
Also for the first time, Fiat Chrysler's Ram pickup beat the Chevrolet Silverado in full-year sales as GM retooled factories to built a new version of the Silverado.
Electric vehicle sales rose almost 37% last year to just over 236,000, Autodata reported.
Last year turned out to be strong as uncertainty waned in talks over a trade agreement with Canada and Mexico and progress toward a trade deal with China, said Jeff Schuster, president of global vehicle forecasts for LMC Automotive, a consulting firm.
Schuster predicted stability this year but wrote that sales could be a bit lower than in 2019.
Last year's sales numbers defied the odds, especially because high interest rates and record prices squeezed some buyers, said Jeremy Acevedo, senior manager of industry insights for Edmunds.
"If 2019 taught us anything, it's that you can't underestimate the power of a strong economy," he said.
The average new-vehicle sale price in December hit an estimated $34,602, setting a record, according to J.D. Power and LMC. Truck and SUV prices hit an estimated $36,935, rising $655 from 2018. Car prices averaged $27,461, a small increase from a year earlier.
But the average incentive, or discount, per vehicle was expected to reach $4,600, a record figure that's up almost 7% from 2018, according to LMC and J.D. Power.
Thomas King, president of analytics at J.D. Power, said the record sale prices shows that automakers are building the types of vehicles that people want to buy. But the record incentive level "signifies that there is still too much supply relative to overall demand."
The Associated Press contributed to this report
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