French Carmakers Try 'Les Promos' in Tough UK Market

24 August 2006

LONDON: French automakers are resorting to incentive schemes in the UK where customers have been saying non rather too often and sales are sagging in the face of stiffer consumer conditions.

Renault in particular has suffered in a climate where total British new car registrations declined by 4.2% during the seven months to July 31.

The company's new car sales were down by a swingeing 24% during the period, while its market share slid to 5.9%, leaving the company fifth in the UK automakers' league.

In a bid to reverse this trend Renault is offering zero per cent interest on four-year finance deals across its entire UK range - the first time it has done so.

Compatriot Peugeot-Citroën has fared better but is also touting large incentives to bolster sales.

Its new car registrations rose 0.9% during the first seven months, and its market share edged-up to 6.2% from 5.9%. The Citroën brand saw registrations fall 4.1%, although it maintained market share at around 4.1%. UK sales for both brands represented more than 7% of overall global sales.

Peugeot spokeswoman Katy Francis says the company is offering 0% finance deals on most of its cars "in order to keep sales and market-share increases".

Recent interest rate rises, higher gasoline prices and a fall in consumer confidence have taken their toll on the market, says the Society of Motor Manufacturers and Traders.

Admits spokesman Nigel Wonnacott: "The UK auto market has been wobbly for the past eighteen months [and] car sellers have to go to lengths to lure people into the showrooms."

Ford of Britain has also seen its seen its UK sales dip but market share has risen slightly to 14.96%, from 14.88%. It is holding off "acute measures to offset market pressures" - at least for now.

The pressure, however, is unlikely to ease any time soon. The SMMT is forecasting a 4.5% decrease in new-car registrations for the year as a whole.

Researcher J D Power says the market is only "coming down with the trend level," adding: "The economic equation is not at all favorable to the car companies as money is being taking out of buyers' pockets."

Data sourced from Wall Street Journal Online; additional content by WARC staff