PARIS - The price war in France is raging like never before. 'Bargaining is spreading everywhere,' said Francois Giaferri, Citroen deputy sales manager for France.
All carmakers are involved. All segments, from the sub-mini to the luxury ranges, are affected.
And all means are used: trade-in bonuses, rebates, special equipment offers, limited editions and special maintenance deals.
In Cherbourg, Normandy, a Ford dealership is offering to lend a Ka for a few months to Mondeo buyers.
INSEE, the French statistics bureau, says car prices fell 4.3 percent from June 1996 to February 1997. The survey is based on official price lists. It includes automaker rebates, but not transaction prices negotiated by dealers with customers.
Sales fell by 22.5 percent in the first four months of 1997. Still, the price war may be helping the market. April sales were only 10.3 percent behind April 1996, when the juppette incentive was in effect.
'The price war has got tougher since the juppette ended, and especially for the last month,' said Luc Francois, sales manager at SA Lemasson, the Cherbourg Ford dealership.
Georges Dieng, auto analyst for Cholet Dupont/Credit Lyonnais Securities in Paris, said the price war makes it impossible to determine the natural level of the French market.
The battle is fierce in the small-car classes. Models like the Peugeot 106, Fiat Panda and Cinquecento benefited most from the juppette. Now carmakers are trying to maintain sales. Peugeot last month offered a FF6,000 ($1,040) rebate on its entry-level 106 Kid, which has a list price of FF59,600.
Fiat offers incentives for trade-ins over eight years old: FF9,000 on the Panda and Cinquecento; FF7,000 on the Punto. Ford does the same, offering FF5,000 for trade-ins on the Ka and FF8,000 on the Fiesta.
Big cars are also affected. Last month, Citroen offered a FF15,000 trade-in bonus on the Xantia, and FF20,000 on the Evasion minivan. Xantia's base price is FF104,500. The Evasion's is FF133,400.
Toyota lowered the price of its FF151,600 RAV-4 VX by FF11,700, even though the car sells well.
Peugeot has drastically cut the price of its slow-selling 605, from FF164,000 to FF135,000 -the price of a mid-range 406.
Ford is pursuing a simple pricing strategy. In April, Ford offered a diesel-powered Mondeo for the same price as a gasoline version. Ford offers Escort, Mondeo and Scorpio wagons for the same price as sedans.
Renault offers a new promotion every month. In April, it was a trade-in bonus: FF10,000 on a Laguna; FF9,000 on a Clio. In May, it is offering a three-year/50,000km maintenance contract for FF1 to any customer who buys a new car.
Carmakers are also adding equipment. Renault now offers the Laguna sedan and wagon with driver-side airbag, antilock brakes and tinted glass for FF1,000. The features previously cost FF10,000.
'The atmosphere favors rebates,' said Dieng. 'Nobody can say when the price fight will end since nobody can predict when a recovery will occur.'