German auto giant Volkswagen said on Monday that strong sales in China and in its home market in July helped it escape a "continuing difficult situation" in the global car market.

VW, which also owns brands including Audi, Skoda and SEAT and which aims to merge with Porsche, said that deliveries to customers in July were up 6.7 percent year-on-year compared to a 16-percent slump in the overall market.

"We are making good progress and winning market share worldwide. Our current delivery figures are above plan... It gives us a solid, positive basis for the post-crisis period," VW, Europe's biggest carmaker, said in a statement.

"However, the recession is not over yet, it has perhaps bottomed out, but we see no signs yet of a sustained recovery on world markets. That is why we are viewing further developments with caution," it added.

Deliveries in China -- up to 127,900 from 76,000 last year -- were boosted by state incentive programmes, while Germany's soon-to-expire "cash for clunkers" scheme meant it sold 26.9 percent more vehicles than in July 2008.

In Europe as a whole deliveries fell three percent, with conditions tough in Spain and in Central and Eastern Europe, while in the Asia-Pacific region, its second biggest market, they soared 58.0 percent.

In North America they fell 3.1 percent and in South America they slipped 1.8 percent, performing better than the overall market in both cases, VW said.