New CAR sales in Germany are being discounted by a record 18%, according to a new survey.

According to the Centre for Automotive Research (CAR), based in Gelsenkirchen, Germany, discounting and special offers have reached a record level because of the slow market caused by a rise in VAT.

Head of CAR, Ferdinand Dudenhöffer, told Bild newspaper that he expects the level of discounting to fall in future months as the market adjusts to the new higher VAT rate.

CAR noted 168 incentives and discounts at dealers, and taking into account hidden actions such as dealer incentives, came up with a total discount figure of 18%.

Importers are offering the most incentives, according to the study. Citroen leads the pack offering discounts of up to 29%, followed by Hyundai (up to 26%), Fiat (up to 25%) and Peugeot (up to 23%). Amongst the ‘German’ manufacturers, Opel was found to be offering the highest discounts of up to 23%.

CAR estimates that discounts will rise further in March. Ford will offer a EUR500 fuel bonus from later this month, while Nissan is giving away in-car navigation free with every purchase.

CAR expects the market to calm down again from May, with average discount levels falling to around 16%.