Luxury automaker Mercedes-Benz is offering people classified as "VIP customers" with discounts of as much as $5,000 per vehicle, and is offering to let its clients forego more monthly payments than the amount offered by rival carmaker BMW.
An October 2 memo sent to dealers of the Mercedes vehicles revealed that the company has started a 2012 program that includes potential customers' special lease agreements and cash offers, according to Bloomberg. The carmaker also wrote an email to dealers on October 5 announcing a promotion that permits certain owners of the vehicles to skip up to five payments.
For the first nine months of the year, Mercedes has sold 5,221 more vehicles in the United States than rival BMW, the media outlet reports. The carmaker is suffering from headwinds in various foreign markets, with September sales in China dropping for the first time in eight months and Germany starting to suffer from the lackluster demand experienced by many other nations in Europe. These ailing economies are putting downward pressure on both BMW and Daimler, which owns Mercedes.
"It isn’t just about being No. 1,"Greg Goodwin, chief executive officer of Vancouver, Washington-based Kuni Automotive, which operates 14 dealerships, including those that sell BMW vehicles, told the news source. "What BMW and Mercedes also are dealing with is global competition and the ebbs and flows of global demand."
Mercedes recently began offering incentives on vehicles sold in Germany, such as a 3,000-euro trade in incentive for its vehicles, according to Bloomberg News. Data provided by trade publication Autohaus PulsSchlag revealed that in the discount levels offered for new vehicles in Germany rose to an average of 12.2 percent in September, which was the highest level since 2010.
Seeing as how car sales in the European nation have fallen 11 percent in September, these incentives are not having the desired effect, the media outlet reports. Since Germany contributes more to regional auto sales than any other nation, this drop may result in European sales of these vehicles dropping to their lowest level since 1993.
"There’s no point buying a new car at the moment," Frankfurt nurse Jiri Macan, who had recently bought a used VW Golf, told the news source. "A used car keeps its value much better."