Shanghai Volkswagen, a key carmaker on the mainland, will extend its regular maintenance work and scale back production as it seeks to reduce inventory amid slowing sales, according to a source. An executive with a major supplier to the carmaker said Shanghai Volkswagen would give some of the manufacturing works an extra weeklong holiday for the maintenance. The carmaker also had to lower production because of lower consumer demand recently, the source said. 'The company wants to ease the burden on the current high inventory too,' he said. 'Overall, its performance this year is quite satisfactory, and it will brave through the rough weather next year.' Shanghai Volkswagen, however, denied a media report that it would suspend production. China Central Television reported yesterday Shanghai Volkswagen and FAW-Volkswagen would halt production at a time when most mainland carmakers would not be able to meet their full-year sales target. 'The [reports of a] so-called production halt were not correct,' said a communications officer with Shanghai Volkswagen. 'We are actually going to do maintenance work, a regular year-end task.' Each of the four production lines would be idled for only a short period in rotation, the official said. FAW Volkswagen, partly owned by FAW Group, was not available for comment yesterday. Shanghai Volkswagen, a joint venture between Volkswagen and SAIC Motor, reported sales of 450,000 vehicles in the first 11 months of this year compared with 396,000 for the whole of last year. But the mainland car industry is feeling the pinch of the global recession as people tighten their purse strings, shunning cars and other luxury products. Last month, car sales fell 14.56 per cent from a year ago to 685,100 vehicles, the China Association of Automobile Manufacturers said. Big carmakers' mainland ventures were set to report slower sales and reduce capacity in the coming months, analysts said. A Guangzhou Honda spokeswoman said yesterday the company had lowered its sales target and adjusted its production mix amid the bleak market outlook. 'The auto sector is heading for a downturn in the coming months,' said Yale Zhang, director of Greater China vehicle forecasting at consulting firm CSM Worldwide. 'But in China, the long-term outlook remains bright and the negative impact on the big players is limited.' Chery, a state-backed carmaker in Anhui province, recently received 750 million yuan (HK$850.8 million) from the provincial government to boost its cash flow, according to a source. It has also secured a loan of 10 billion yuan from the Export-Import Bank of China to bolster its exports.