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Heavy Discounting across Europe Continues

Recently we have seen stories of very heavy discounting with VW being described by Fiat CEO, Sergio Marchionne, as a “bloodbath of pricing and .. a bloodbath on margins” and now we have Opel advertising huge discounts across much of their model range. IN both newspaper and magazine articles and on their own website in Germany they are offering such deals as Corsa at €9,990 and €2,800 of options, Astra at €13,990 and €3,510 of additional options.

This level of discounting has historically been the reserve of daily rental companies and not normally so blatantly publicised, due to the very negative impact it has on used values. As I mentioned the reduced 1-5 year old car parc is helping RVs remain generally buoyant but if this trend of very high and very public discounting continues for much longer it is going to be bad news for used car traders who may see the value of their stock fall almost as sharply as during the darkest hours of the credit crisis in 2008-09.