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Marketing costs £500 per new car sold

Car manufacturers operating in Europe invested an average of €1,100 euros (£730) in sales promotion for every passenger vehicle sold in 2004, according to findings of a study carried out in six European countries by marketing information provider TNS.

In the UK the figure is €737 (£507) in 2004, an increase of €15 (£10.30) on 2003.

The total investment in sales promotion in the countries covered by the study - Germany, Italy, Spain, France, the United Kingdom and Portugal – rose to more than €12bn (£8.3bn).

The study also reveals that promotional efforts in the car market are on the increase, with a 10% rise in investment per passenger vehicle sold in Europe since 2003.

However, promotional techniques vary from one market to another.

Marc Bouvier, director of Promocar studies for TNS, said: "While discounting continues to be the most standard way of promoting car buying in Spain, in the United Kingdom attractive financing packages have been strongly implemented, whereas Germany has witnessed the development of special multiple series or action models."

Other recent trends highlighted by the study include the diversification and sophistication of promotional policies. Many car manufacturers traditionally regarded as belonging to “specialist” or luxury categories used to shy away from using sales promotions as part of their marketing mix.

Today, however, promotions are beginning to be used across the board, although the promotion features are adapted to suit the client, for example offers may include attractive leasing formulas, free high-tech equipment or driving courses.

Bouvier said: "These practices have become so deeply ingrained in buying habits that it is now unlikely for a buyer to sign an order form without trying to obtain some kind of discount, free gift or bonus from the salesperson or dealer. Today it is practically unheard of for a vehicle, whatever the category, to be purchased at the list price, without some sort of incentive."

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