BERLIN (Reuters) -- Volkswagen Group reported a rare dip in global sales of its core VW brand in July and said business conditions may remain tough for an industry beset by slumping demand and overcapacity.
VW brand sold 466,100 vehicles last month, down 0.5 percent from July 2012, VW said today. The brand accounts for about half of the automaker's global deliveries.
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 fell 1 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," he added.
Seven-month sales up 4%
VW brand sales increased by nearly 4 percent to 3.38 million vehicles in the first seven months as gains in China offset a weak European market.
Seven-month VW deliveries plunged 9 percent in Germany to 328,400 cars while pan-European sales were down 7 percent to 980,000.
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 such as the VW Up city car to ultra-luxury sedans including the Bentley Continental.
Despite the latest drop in brand sales, VW continues to outperform rivals. Half-year group deliveries, including luxury nameplates Audi and Porsche, were up 6 percent to a record 4.7 million, powered by gains in China. Seven-month data for VW Group deliveries will be published on Friday.