Volkswagen increased vehicle sales in July sharply and said it remained on track for further growth, signaling that economic weakness has so far not had a material impact on its business.

The Volkswagen Group is maintaining its growth trajectory with its strong model range, group head of sales Christian Klingler said in a statement on Friday.

Retail sales in July rose 16.3 percent, a faster rate of increase than the 14.4 percent clip in the first seven months of the year and the 5.5 percent gain recorded by global auto markets overall.

China, Volkswagen's single largest market, helped pitch in a 16.4 percent rise in volumes in January through July. During the same period, deliveries of vehicles to customers in Central and Eastern Europe rose 28.7 percent, while sales jumped 21.4 percent in the United States.

Growth was tepid by comparison in Western Europe.

German economic growth ground to an almost complete halt in the second quarter, when activity expanded by a mere 0.1 percent over the first three months.

With the euro zone's largest economy dangerously close to contraction, VW may be set for tougher times ahead. Roughly every third car sold in Germany stems from a brand offered by VW.

Shares in Volkswagen have been hammered in recent weeks on the back of widespread selling in cyclical stocks as fears of a double-dip recession in developed economies took hold among investors.

The preferred stock listed in Germany's blue-chip DAX index <.GDAXI> has declined 33 percent, breaking through key support levels, and currently trades around 101 euros per share -- its lowest since last October.

(Reporting by Christiaan Hetzner)