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Staff photo by Mike Pare / Vehicles are lined up at Marshal Mize Ford in Chattanooga, which like all auto dealers is grappling with the impact of the coronavirus outbreak.

New vehicle sales in Hamilton County sped up in May over a sluggish April as buyers seized on incentives and low interest rates amid the coronavirus crisis.

But even with May's 12.4% gain over April, the sale of new trucks and cars were still off 24% compared to the same month in 2019, the Hamilton County Clerk's Office reported.

For the first five months of the year, the number of new vehicles titled is down 8.5% to 4,836 compared to 2019, according to the Clerk's Office.

Brian Johnson, sales manager at Village Volkswagen of Chattanooga, said sales picked up in May with a strong SUV market.

"The SUV is king right now," he said, adding that manufacturers have "stepped up to the plate" with incentives.

Thad Narramore, Marshal Mize Ford's new vehicle sales manager, said that dealership was up in May over a year ago.

"There's a lot of pent-up demand," he said. Narramore, too, cited vehicle incentives.

Also, online sales are strong as many consumers are at home, he said.

"Our internet department had a ton of business," Narramore said. He said the dealer saw business from five different states and was delivering a vehicle to New York City on Tuesday.

Johnson said the internet is key to Village Volkswagen's sales as well.

"There's a lot of shopping going on," he said. "People have a lot of time to search."

Auto researcher Kelley Blue Book estimated average transactions nationally in May were up to $38,940 as new vehicle prices grew $1,618, or 4.3%.

Tim Fleming, a Kelley analyst, said that while new-vehicle sales are off, such perks as incentives, deferred payments and low interest rates are helping consumers stretch monthly payments over longer terms.

"Inventory levels have tightened as the economic recovery has begun, but little new supply has arrived yet from the factories that restarted in May," he said.

Fleming doesn't expect transaction prices to stay at the 4% level.

"If factories are slow to restart and new-vehicle inventories remain low, manufacturers will pare back their incentives, placing pressure on new-vehicle prices," he said.

Narramore said that automakers are still a few weeks from reaching production capacity. When that happens and more inventory is available, he's expecting an "outstanding" last part of 2020, he said.

Also, the auto dealers said they're taking steps to keep their showrooms cleaner in the wake of the coronavirus.

Johnson said Village Volkswagen is wiping down vehicles, wearing face masks and has put up screens at the service center for social distancing.

"Everyone is keenly aware of customers and keeping everybody safe," he said.

Narramore said there's a dedicated person who "does nothing but wipe stuff down" at Marshal Mize.

Among automakers reporting U.S. sales in May, Kia Motors America said that sales slid 23.7% in May compared to a year ago. Sales were 45,817 last month.

Subaru of America reported 51,988 vehicle sales for May, a 19% decrease compared with May 2019.

Hyundai Motor America reported total May sales of 57,619 units, a 13% drop over May 2019. Retail sales grew 5% despite the pandemic, but fleet sales were down 79%, the company said.

Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.

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