Europe's biggest carmaker Volkswagen AG said Thursday worldwide sales of its flagship VW brand slipped 1.5 per cent to 305,000 during July in the face of growing economic uncertainty and high fuel prices.

However, the German-based auto giant said it set a new record for worldwide deliveries during the first seven months of the year, rising by 4.7 per cent to 2.21 million vehicles.

In particular, the world's leading emerging economies continued to power VW sales, with China reporting a 12.9 per cent increase in deliveries between January and July.

While VW domestic German market also reported record deliveries (up 6.2 per cent), for the first time more VW brand vehicles were delivered in Brazil than in Germany during the first seven months of the year. Deliveries in Brazil rose 20.4 per cent.