Europe price war ramps up automaker tensions
Discounting said to be at worst levels since Lehman crisis
PARIS -- Tensions are rising among car manufacturers in Europe as they blame each other for a profit-killing price war.
With European car sales likely to slip to their lowest level since 1995 as austerity measures reduce consumers' buying power, volume brands are offering average discounts of 20 percent in key European markets to try and sell their new cars.
The price war in Europe is "quite serious and possibly becoming worse because of some desperate moves of people who have cash issues," Renault Chief Operating Officer Carlos Tavares told Automotive News Europe.
Susan Docherty, head of Chevrolet in Europe, said Fiat and PSA/Peugeot-Citroen are producing "very scary numbers" with discounts of as much as 30 percent off gross retail prices. "Nobody can make money in Europe when you've got incentives at that level."
Erich Hauser, a London-based analyst at Credit Suisse, agrees: "The biggest problem for the industry is the complete meltdown of pricing discipline," he said.
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