Heavy Clouds Ahead: 3000 Euro Discount On A Mercedes in Germany
|   Friday, October 19, 2012
The general European car market decline, is affecting this year even the big, solid German manufacturers. Because of the economic downturn, car companies, like Mercedes Benz, have had to rise the incentives level to a new high.

In order to stimulate sales, the German automaker is proposing its customers a 3,000 euros (3,900 dollars) trade in incentives. This reduction is equal to that offered by Renault for its Megane compact. Other automakers like General Motors, Opel unit or Ford, all offer discounts going above 3,500 euros on compact cars.


In accordance with the trade publication Autohaus PulsSchlag, via Autonews, the German reduction for new vehicles rose to an average 12.2 percent last month, reaching the highest point since 2010. Note that Germany holds 25 percent of the regional auto market; thus, a decrease in car sales in this country will likely lead to the lowest level of sales in Europe since 1993.

Until last month, the Volkswagen and Mercedes brands had been more resistant to the region's sales decline compared to Renault, PSA/Peugeot Citroen or Fiat. This was largely due to a strong domestic market, which is also pretty stable. The European sales scored by Mercedes, the world's number 3 premium car manufacturer, went down by 6.1 percent.

"Germany's sales results are sending the signal that we're certainly not out of the woods, but are deep in the woods and aren't going to get out soon," said Jonathon Poskitt, analyst for LMC Automotive in Oxford, England. "It looks like 2013 is going to be another difficult year."

The industry association ACEA (The European Automobile Manufacturers Association coming from the French Association des Constructeurs Européens d'Automobiles), said the European car registrations last month decreased 11 percent from the year earlier, down to 1.13 million vehicles, pushing nine-month sales down 7.2 percent to 9.72 million. And this week, ACEA revised its forecast for European sales in the negative, projecting an 8 or 10 percent contraction in the region this year.

France's Renault is selling the Megane model in Germany for as little as 12,990 euro, compared with a sticker price of 15,990 euro, according to its Web site. The French builder is also offering around 2,500 euro on trade-ins.
"French automakers especially have been pushing incentives lately," Michael Punzet, analyst at DZ Bank in Frankfurt said for Autonews. "This weighs on the resale value of their vehicles."

The South Koreans from Hyundai Motor Co. are some of the few mass market carmakers with growing sales in Europe. The company is promoting so-called 5-Star editions of models, including the i10 minicar, i20 subcompact and ix20 compact, offering its clients savings of as much as 3,360 euro on the 18,970-euro ix35 crossover.

However, it seems that a few drivers are looking for even deeper reductions than carmakers are willing to take on. Ursula Kienle, a 70-year-old retiree, backed up from the western Frankfurt VW dealership after rejecting the seller's offer; apparently 15 of 17 cars in the lot were being advertised as discounted. "We wanted to buy the beautiful new Up, but they wouldn't go below 11,000 euro, and we weren't prepared to pay more than 10,000 euro."
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