LONDON - Citroen UK says the 17.5 percent discount it gave car buyers in May was a success despite a drop in its overall retail sales compared with May 2004.
The company said the promise to pay customers' value-added tax helped it sell 4,506 cars in May, maintaining a 5.3 percent share of the UK retail market. May retail sales in the UK slipped to 85,377 units compare with 90,135 in May 2004.
"We are happy that our VAT-free and cashback offers are helping to maintain our share of a difficult market," Citroen UK spokesman Julian Leyton said.
He said the transparency of the offer makes it popular with private customers, who account for 60 percent of Citroen's UK sales and 45 percent of the country's overall car sales.
"Discounting is widespread in Citroen throughout Europe, but we like the VAT-free offer because it is easily understood," Leyton said.
Citroen UK has been accused by some in the industry of "buying sales" because of the no-VAT scheme, which the company first ran in May 2004, and its use of other straight discount programs. But the company is undeterred.
"It's a tough market and we need strong, hard-hitting marketing," Leyton said.
The main players in the UK retail car sales sector are Ford, with a share of about 13 percent; Vauxhall and Volkswagen and Citroen sister brand Peugeot, each with about 7 percent; followed by Citroen, Toyota, Renault and Honda with about 5 percent each.
Easy to understand
"Our competitors run discount schemes. Some give straight discounts, others do it by means of special editions, or giving dealers wider margins on which to negotiate," Leyton said. "Ours is simply more high-profile and transparent."
The program offered customers discounts of £3,900 to £4,200 (E5,867 to E6,090) on versions of the top-of-the-range C8, but the average VAT discount across all sales amounted to about £2,000.
With on-the-road charges taken into account, Leyton said the true amount of Citroen's discount was closer to 15 percent.