Germany's premium carmakers launch price war

Audi, BMW, Mercedes and Porsche step up incentives

Munich. German premium-car makers used to stand for fixed prices and no discounts. No more.

In Germany's weak new-car market, Audi, BMW, Mercedes and Porsche are now trying to reach their 2005 targets with special campaigns.

These include offering customers expensive gifts, giving dealers high bonuses and creating low-cost leasing deals.

According to Automobilwoche research, dealers in Germany are offering discounts of up to 15 percent for new cars.

Dealers polled in Augsburg and Nuremberg said they are offering discounts of between 10 percent and 11.5 percent on an Audi A6 2.7 TDI. This equals price reductions of up to 5,275 euros.

Audi dealers will give standard discounts of between 8 percent and 9 percent on the A6.

The Audi Center in Duesseldorf entices customers with day registrations for the A6 and with discounts of more than 7,000 euros.

BMW offers deals for new 1 series

The situation at BMW is similar. Internal documents show that dealers offer a 750-euro bonus when models from other brands are traded in. Dealers receive conquest premiums of 500 euros.

BMW wants to achieve a conquest rate of 75 percent for the new 1 series.

Trade-in bonuses are 1,500 euros for the 5 series and up to 4,000 euros for the 7 series.

BMW pays up to 8,000 euros to customers who prematurely end their leasing contracts with foreign brands. The corresponding conquest bonus for dealers is 2,000 euros.

Several BMW dealers woo customers with high discounts.

Mercedes also helps sales with special measures. Trade-in premiums for the C-, E- and S-class cars are between 1,000 and 1,500 euros and even up to 4,000 euros for the S class.

On top of that, leasing contracts are subsidized with up to 5 percent of the monthly rates. And dealers are open to further negotiations.

Even Porsche makes use of "sales promotions," an internal instruction says.

To reduce stocks of the old 911 and the Boxster (996 and 986), there are trade-in premiums of up to 3,000 euros plus "loyalty bonuses" and "conquest bonuses for foreign brands."

"It only shows how highly competitive the market is if discounts for premium vehicles work," said VDA President Bernd Gottschalk. "And it shows that, after a slack period of five years, brands fight over customers in all kinds of ways."

Tags: Retail

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