Volkswagen Group car sales slumped 4 per cent in January, pulled back by a double-digit slowdown in its biggest market, China.
Volkswagen has been struggling since the September 2015 revelation of its worldwide diesel emissions scandal, but soaring sales in China had been masking any impact on sales.
Last month, however, customer deliveries across the VW Group, which includes VW as well as up-market brands Audi and Porsche, fell 14 per cent in China to 400,100 units.
China is by far VW’s biggest market, accounting for nearly half of all sales, which totalled 847,800 last month globally.
Fred Kappler, head of group sales of Volkswagen, pointed out that global sales outside of China were up 4.9 per cent.
Mr Kappler, who expects to see “healthy growth” in China this year, said an early Chinese New Year holiday had an impact on sales. Another factor was a sales tax increase on small-engine cars.
Beijing is currently phasing out a tax incentive that had halved the 10 per cent sales tax to 5 per cent. As of January, the tax is 7.5 per cent, and it is due to return to 10 per cent in 2018.
In Europe, customer deliveries were up 7.0 per cent to 312,900 cars, led by a 13.6 per cent climb for Central and Eastern Europe.
In North America, growth was 9 per cent, to 66,600, with US sales jumping 14 per cent.