Volkswagen sold 4,657 cars and trucks in Japan last month while sales by Mercedes slumped 25.1 per cent to 3,437 vehicles, the Japan Automobile Importers Association said.

"Mercedes, which previously led import car sales, suffered a decline of more than 1,000 vehicles as demand for its latest models is not as strong as when those models were first put on the market," association spokesman Michiaki Ishida said.

"Volkswagen's strong sales can be attributed to the new Beetle which has been very popular since its introduction (in Japan) in September," Ishida said.

The updated successor to the classic Beetle has gone down well in Japan, which has traditionally embraced smaller cars like the British Mini.

Volkwagen grabbed a 21.88-per cent market share in Japan's imported auto market in February, followed by Mercedes' 16.15 per cent and Bayerische Motoren Werke (BMW) AG's 12.26 per cent. BMW's sales increased 13.7 per cent to 2,610 vehicles in the month.

Overall sales of vehicles made by foreign manufacturers slipped 1.7 per cent from a year earlier to 19,788 vehicles, with sales of cars falling 2.6 per cent and truck sales growing 40.7 per cent.