VW Brand Sales Slip in China

Volkswagen AG says its sales of VW brand vehicles in China declined 2% to 223,500 units in July compared with the same month last year.

It was the second consecutive month of year-on-year shrinkage. Even so, VW brand sales in China in January-July totaled 1.71 million units, up 5% from January-July compared to 1.62 million units during the first seven months of 2017. The VW brand continues to be the most popular in China.

VW blames the sales dip on China’s decision to lower import taxes on imported cars to 15% from the previous 25%, effective July 1.

The cut has little direct effect on VW, which uses local plants to make most of the vehicles it sells in China. But the company says the tax reduction prompted consumers to broaden their purchase deliberations to include more imported models.