Mercedes offers 3,000-euro discount amidst struggling sales

The bad economy looks to be getting deeper over in Europe. The latest evidence is German carmakers' desperate efforts to prop up badly-lagging sales. Last month, European discounts on German brands averaged 12.2 per cent. And now, Mercedes-Benz is offering a 3000-euro (CAD$3,855) trade-in incentive to customers.

Success of the discounts has been minimal at best. September car sales in Germany fell 11 per cent despite the incentives. With 25 per cent of Europe's car sales coming from the Germans, some expect the drop to also pull the entire continent's numbers down to 1993 levels.

"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," Jonathon Poskitt, an analyst at LMC Automotive in Oxford, England, tells Automotive News Europe. "It looks like 2013 is going to be another difficult year."

And those monthly numbers are actually rosier than reality. Sales of discounted "zero-mile used vehicles," accounted for 33.5 per cent of September sales in Germany. Zero-mile cars are created in a practice by German dealers in which new cars are licensed by the dealer, then sold as used at a more than 20-per cent discount. It moves inventory off the lot, but is costly to dealers and manufacturers.

Click here to watch a report on the record profits Mercedes made back in 2011.

News Source: Automotive News Europe - sub. req.

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