* Brazil centre may help cater to needs of market -sources
* Ageing models, slowing economy have weighed on VW's Brazil sales
* VW denies plans
By Andreas Cremer
BERLIN, July 24 (Reuters) - Germany's Volkswagen is considering setting up a planning centre in Brazil to boost flagging sales in the world's fourth-largest car market, sources told Reuters.
Europe's biggest automotive group is spending 3.6 billion euros ($4.85 billion) on new models, plants and technology in Brazil through 2018.
Slowing growth in Brazil, once one of the most dynamic emerging economies, and an ageing model fleet have weighed on VW sales which plunged 18 percent in the first half of the year to 271,700 cars, after a 13 percent decline in 2013.
VW is mulling to set up a so-called development and planning centre to ensure its vehicles cater more effectively to the needs of Latin America's biggest economy, two sources familiar with the matter said on Thursday, declining to be identified.
A spokesman from the Wolfsburg-based carmaker denied the plans.
VW said last week it will set up a similar centre at its U.S. plant in Chattanooga, Tennessee to help reverse declining deliveries. The carmaker aims to hire about 200 engineers to monitor the world's No. 2 auto market more closely and revamp vehicles more quickly.
U.S. sales of VW's core passenger-car brand have been shrinking since a 2011-12 surge, threatening long-term targets.
Carmakers are betting on Brazil despite the country's economic decline.
VW's Audi brand will spend 150 million euros to start production in 2015 at a VW facility in Sao Jose dos Pinhais while luxury rival BMW is spending 200 million euros on a plant in Santa Catarina to start production in late 2014. ($1 = 0.7427 Euros) (Reporting by Andreas Cremer, editing by David Evans)