* Only second drop in VW brand sales since Dec. 2009
* VW brand 7-month sales up 3.7 pct to 3.38 mln
* Analyst sees rebound in H2 brand sales
(Adds analyst comment, background and shares)
By Andreas Cremer
BERLIN, Aug 13 Europe's biggest automaker
Volkswagen reported a rare dip in sales of its core
passenger car brand and said business conditions remained tough,
in an industry hampered 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
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.
"The July drop may just be a slip-up," said Hanover-based
NordLB analyst Frank Schwope. "Brand sales should bounce back in
Sales of VW's biggest volume brand declined in all major
markets except the Asia-Pacific region where China, VW's biggest
market, posted a 19 percent gain in the January-July period.
Year-to-date deliveries of models 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 VW brand contributed more than a quarter of the group's
3.43 billion euro ($4.56 billion) operating profit in the second
quarter ended June.
The "market situation remains challenging," VW sales chief
Christian Klingler said.
The multi-brand group withstood most of last year's slump
in major European markets thanks to growth overseas and a wide
range of models from small fuel-efficient vehicles like the Up!
city car to ultra-luxury saloons including Bentley's
By contrast, automakers dependent on 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.
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.
Europe's No. 1 carmaker by sales last month stood by its
goals to match last year's record operating profit and to push
sales and deliveries to new highs after posting a surprise gain
in second-quarter earnings.
($1 = 0.7523 euros)
(Reporting by Andreas Cremer; Editing by Erica Billingham)