For the first time in years, Peugeot is using incentives to sell cars, including the 307 and the 206, Europe's best-selling model in 2002.
Peugeot had left broad discount campaigns to its sister brand Citroen and other volume carmakers. But in February, Peugeot's western European sales slumped 11.5 percent from February 2002, triple the market's average decline of 3.5 percent. In contrast, discounting Citroen's sales soared 14.5 percent.
"We'll be offering incentives in March, notably on the 206," Peugeot Managing Director Frederic Saint-Geours said.
To avoid damaging its image too much, Peugeot is disguising its sweeteners as special-series models that are crammed with equipment - navigation or sound systems on the 307 and rain sensors or alloy wheels on the 206 - discounted from prices as single options. On the 307 special edition, the customer advantage amounts to 10 percent of the list price, about E2,200. The price break on the 206 is almost E1,900.
"We can't buck the market," said a Peugeot spokesman. "But we are not slashing prices."
In France, Peugeot sales have fallen every month since April 2002, except for December. February sales plunged 18.8 percent after a 15.2 percent fall in January.
Saint-Geours downplayed the slump, saying the early months of 2002 had been exceptionally strong.
He said he expects to sell 820,000 to 830,000 206s globally this year, in the same bracket as in 2001 and 2002. He isn't sure that the 206 will stay ahead of the Volkswagen Golf as western Europe's best-selling car, but said that the title isn't "very important." Peugeot expects to sell 45,000 units a year of the new 307 CC starting in the autumn.
Citroen is offering up to E4,600 off a top-line diesel C5.
But brand Managing Director Claude Satinet denies that his incentive policy is different.
"All our competitors do it," he said. "Simply, we are open about it, which means all our customers are on the same footing. They don't have to rely on their bargaining skills."