BERLIN: Volkswagen, Europe's biggest automaker, reported a rare dip in sales of its core passenger car brand and said business conditions may remain tough for an industry beset by slumping demand and overcapacity.
The VW namesake brand, accounting for about half of the German powerhouse's global deliveries, sold 466,100 vehicles in July, down 0.5 percent from July 2012, Wolfsburg-based Volkswagen said on Tuesday. It was only the second month of falling sales in three and a half years.
Since a fall in December 2009, VW brand sales rose for 38 straight months until March 2013, when they eased 0.8 percent. Deliveries were up again in April, May and June.
"Given that the uncertain economic conditions will continue over the coming months, we are keeping a very close eye on developments in global automotive markets," VW sales chief Christian Klingler said. The "market situation remains challenging".
Seven-month deliveries of vehicles including VW's best-selling Golf hatchback plunged 9.1 percent in Germany to 328,400 cars while pan-European sales were down 6.8 percent to 980,000, according to VW.
The multi-brand group withstood most of last year's slump in major European markets thanks to growth overseas and a model portfolio ranging from small fuel-efficient vehicles like the Up! city car to ultra-luxury saloons including Bentley's Continental.
By contrast, automakers focused on austerity-strapped European markets such as PSA Peugeot Citroen have been suffering for months from the region's economic crisis, seeking to close factories and lay off staff to counter heavy losses.
Despite the latest drop in brand sales, VW continues to outperform rivals. Half-year group deliveries, including luxury nameplates Audi and sports-car maker Porsche, were up 5.5 percent to a record 4.7 million, powered by gains in North America and China. Seven-month data will be published on Friday.
The VW marque's year-to-date sales were up 3.7 percent to 3.38 million autos.
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