May 15, 2015 / 6:24 PM / 2 years ago

VW group sales fall for first time in years

A woman looks a Volkswagen car during a presentation at the 16th Shanghai International Automobile Industry Exhibition in Shanghai, April 21, 2015.Aly Song

FRANKFURT (Reuters) - Volkswagen (VOWG_p.DE) group sales fell for the first time in at least four and a half years in April, raising pressure on the German carmaker to fix trouble spots laid bare by the shock ouster of Chairman Ferdinand Piech.

Deliveries at the 12-brand group, including luxury division Audi and sports-car maker Porsche, slid 1.3 percent year-on-year to 853,200 cars, VW said on Friday, as slowing momentum in China and a drop in Latin American sales outweighed gains in Europe.

Monthly sales at Europe's largest automotive group have not shrunk at least since December 2010, according to company records checked by Reuters.

The drop in April, published by VW after German stock markets had closed for the week, reflects the 4.8 percent decline published earlier this week in core brand sales which account for 60 percent of group deliveries.

"While we felt tailwinds in Western Europe and North America and could increase group deliveries strongly in some places, South America and Eastern Europe remain challenging, especially due to the market development in Russia," VW sales chief Christian Klingler said in a statement.

Volkswagen Chief Executive Martin Winterkorn has pledged to tackle problems - such as weak profitability at the core VW brand and underperformance in the United States - that have come into focus after being flagged by Piech, prompting a public showdown with the CEO and the Chairman Piech's ouster.

While VW is struggling to revive business in the U.S. due to a lack of models in lucrative crossover segments, the Wolfsburg-based carmaker is also grappling with slowing demand in China, a steady source of group profit in past years and destination of more than a third of its models.

"The risks from the (VW brand) sales numbers and China news pose material downside risks to earnings per share" at VW, Morgan Stanley said on Thursday in a note to analysts. "We think the upside for the group is being overestimated."

The group did not break out regional sales figures for the month of April but said that deliveries in Brazil were down 26.7 percent at 200,400 vehicles in the first four months of 2015, while sales were up 0.2 percent at 1.19 million in China.

Last month, it had said January-to-March sales in Brazil were down 22.1 percent and in China were up 2 percent.

Reporting by Maria Sheahan; Editing by Elaine Hardcastle

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