Volkswagen AG's China head said the country's overall passenger car market would see slower growth in the second half of 2016, while the potential expiry of tax breaks on small engine cars could hit the firm's sales next year.
The carmaker's China CEO Jochem Heizmann told reporters in Beijing that sales growth in the first half had been faster than forecast and it was now expected to moderate in the second half.
He added that if tax breaks on smaller engine cars expired it could help drive pre-sales at the end of 2016, but would have a bigger negative impact on sales in 2017.
Deliveries for Volkswagen Group China grew 6.8 percent in the first half of the year compared to the same period a year ago.
That represents a rebound from a 3.6 percent contraction for 2015 as the Chinese economy stabilizes and the tax cut for small engine cars boosts sales.