VW's free aircon offer on new Golf dismays investors

VW has launched a free air conditoining offer across the Golf Mk 5 range, representing an effective discount of €1,225 or an average 8%, only three and a half months after the model's continental launch.

Billed as a celebration of 30 years of Golf production, the promotion must have in its sights the fulfilment of an ambitious 2004 sales target in a still-weak continental European market. Despite the availability of the new Golf after a delayed production ramp-up, VW Group sales dropped 23.4% in January's French market, which was down 11.9% overall, while the German new car market is not expected to show more than 3% growth this year, and then not until the second half.

The news of the promotion caused VW AG shares to lose nearly 3% on the Frankfurt stock exchange yesterday morning. VW has indicated that the Golf offer will not be extended from LHD models to the UK market.