German car-manufacturer Volkswagen plans to cut 3,000 jobs at one of its plants in Brazil in response to declining sales, as South America's largest economy slows down.

The job cuts will be from the Anchieta plant near Sao Paulo, which employs a total of 16,000 people. Company officials said job cutting was the only solution after the plant's unions rejected management proposals to cut costs by reducing work hours and pay.

Negotiations continue with the unions of the Taubate factory, north of Sao Paulo, to avert potential layoffs from that plant.

Volkswagen employs about 28,000 workers in Brazil. The carmaker saw sales fall 27 percent in September and another 17 percent in October compared to a year earlier.