Carmakers doing business in Germany are increasing customer incentives in order to bring in more buyers to their products, prompted by the current economic slump in the European country. German premium carmaker Mercedes-Benz has been forced to increase incentives to a two-year high. It is now offering customers a EUR3,000 ($3,900) trade-in incentive just to boost vehicle sales.
The incentive equals the discounts being offered by French carmaker Renault for the Megane compact. On the other hand, price discounts at General Motors Co.\'s Opel unit and Ford Motor Co. now exceed EUR3,500 on compact cars. According to trade publication Autohaus PulsSchlag, German discounts on new vehicles soared to an average 12.2 percent in September, the highest since 2010.
The rise in incentives, however, has so far failed to translate into increase in sales, as carmakers in the country suffered an 11 percent car-sales drop in September 2012.
The sales dive in Germany, which accounts for around 25 percent of sales in Europe, is expected to drag the figures for the region in 2012 to the lowest level since 1993. Customers are now more inclined to acquire used vehicles than new ones, simply because the economy is discouraging them from doing so.
German carmakers Volkswagen and Mercedes-Benz had been able to withstand the sales decline in Europe thanks to strong domestic market -- that is until September 2012.
The VW brand suffered a 14-percent decline in European registrations in September. The brand also suffered a 20-percent drop in sales in Germany for the month. Mercedes, meanwhile, posted a 6.1 percent drop in sales in Europe, and nearly double the figure in Germany.