SHANGHAI -- Volkswagen AG's two car-making ventures in China sold almost 19 percent fewer vehicles in August compared with July, as a sales boost triggered by earlier price cuts wore off in a weak market.
Growth in sedan sales in China has decelerated since April when Beijing slapped curbs on credit, afraid that over-investment in pockets of the economy could generate more bad loans.
Volkswagen, China's top foreign car maker with about a quarter of the market, saw sales drop 18.6 percent to about 40,900 units in August on July, a company source told Reuters on Thursday citing preliminary figures.
"It's really not that strange," said CSM analyst Yale Zhang. "They cut prices in June, which had a very obvious effect in July. There's nothing surprising about a fall in August.
"September is traditionally a busier month for sales anyway."
But speculation of a weak August depressed Volkswagen's Frankfurt-listed shares, brokers said, coming after already poor U.S. vehicle sales.
"The declining sales in China are much worse. This market is as important to VW as Germany," said analyst Albrecht Denninghoff at HVB. "If the China performance worsens, that is a significant drag on the entire group."
Volkswagen's sales in July accelerated almost 53 percent from June, after prices were slashed by up to 11.7 percent, following a similar move by arch-rival General Motors.
Volkswagen's main venture in Shanghai posted a sales slip of about 20 percent to 20,600 cars last month, the source said, down from 28,060 in July.
Its venture with First Automotive Works in the northeastern city of Changchun sold about 20,300 cars in August, a drop from 22,155 cars in July, the source added.
Volkswagen executives said last month they expected China car sales this year to remain almost flat or grow at best about 10 percent.
Volkswagen, Ford Motor Co. and other multinationals have unveiled plans to invest some $13 billion to bump up production to some six million cars annually in China by the end of the decade, prompting fears of a margin-sapping glut.
Car sales rose marginally in July to snap a three-month falling streak. But analysts have warned against premature celebration amid lingering impact from government curbs on credit to cool an economy in danger of overheating.
Final sales figures for August are expected later in September