Sao Paulo, Aug 8 (IANS): The Brazilian unit of German automaker Daimler said it is suspending production at one of its four plants for two weeks as a result of a steep decline in sales.

The suspension will affect 7,000 workers at the Sao Bernardo do Campo plant in Sao Paulo state, who will go on paid leave, Efe reported Mercedes-Benz do Brasil Ltd. as saying on Friday.

The decision responds to "the need to adjust production to fall in the market".

The auto industry in Brazil faces a sharp reduction in sales amid a severe economic slowdown, with analysts estimating that gross domestic product will shrink at least 1.5 percent this year.

A report from the national association of motor vehicle manufacturers, said motor vehicles production in Brazil in July was 14.9 percent lower than the same month in 2014.

Sales have fallen 22.8 percent since July 2014, leading several companies to apply measures similar to those announced on Friday by Mercedes-Benz, while some auto-makers have resorted to mass layoffs.