Volkswagen Group of America Inc., the U.S. unit of Volkswagen AG (FRA:VOW3), said Tuesday it sold 31,920 units in the U.S. last month, a 2.6 percent decline from the same period last year and a 21 percent drop from August.

So far this year, the German automaker hasn’t fared so well in the U.S., with sales down 2.6 percent to 314,833 for the first nine months of the year as its Detroit competitors, especially Ford, have rolled out some appealing compacts and sedans. “While September was an expectedly tough month for the industry, Volkswagen is seeing some stability,” Mark McNabb, chief operating officer for Volkswagen’s U.S. operations, said in a statement.

"VW has fallen short of the industry in terms of sales growth this year," said Jessica Caldwell, senior analyst for Edmunds.com, the auto information and pricing provider. "The company is struggling with phased-out vehicles and finding volume in segments in which they are overshadowed by more recognizable nameplates. Incentive spending, while down from last month's aggressive spend, is still more than double what it was last September."

The company saw declines in all models except the Tiguan compact crossover, which increased 9 percent from the same month last year to 2,406 units, and the Beetle, which jumped 35 percent on the novelty of the convertible that came out in November. Excluding the new convertible, Beetle sales fell 24 percent to 1,980.

The Golf, Golf R and GTI compacts retreated 35 percent due to heavy competition in the U.S. for smaller cars. Volkswagen has boosted incentive spending to try to recover lost ground (it had a great 2012). The company boosted incentives by nearly 20 percent in September, to an average $2,530 per sale, according to auto information provider TrueCar.com. Volkswagen's incentives went from below industry average last year to above this year.

Jetta SportsWagen sales fell 14 percent to 1,855, while Kentucky-made Passat full-sized sedan sales fell 17 percent to 7,900 units.

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