New vehicle sales in Brazil fell year on year in August but rose month on month, national automobile dealership association Fenabrave said.

Sales dipped 0.4% to 236,921 units versus August 2010 but rose 6.03% from July Fenabrave told Dow Jones.

In the first eight months of the year, car sales increased 4.9% to 1.73m units.

The slowdown in year-over-year growth reflected the impact of government economic cooling measures, Fenabrave said.

The government has been working to cool the economy as part of a drive to pull down inflation, now running at 7.1%.

Most anti-inflation measures have taken aim at consumer demand and credit. Earlier this year, the government raised taxes on many forms of consumer credit.