General Motors’ Opel unit is considering a new round of incentives in Europe to better compete against increasing competition from Volkswagen, a top GM executive told Reuters.

“People have naturally become used to being fed (incentives), and so long as there is no special programme, they won’t jump,” GM Europe deputy chairman Carl-Peter Forster reportedly said on the sidelines of an industry conference in Stuttgart.

Prior to the launch of its Astra compact model in March, Opel had offered a rebate on option packages to customers ordering the car before it hit dealer showrooms, the report said.

“Now we are considering when we have to step on the gas and whether to ring in another round or not,” Forster, the former head of Opel, told Reuters.

Shortly after Opel announced its offer, Volkswagen made an offer to buyers of its new Golf V model, whose sales had been disappointing, that it would add air-conditioning to their cars for free, the news agency noted.

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“Volkswagen has become extremely aggressive in pricing, with net transaction prices below that of the Astra,” Forster reportedly said.

According to Reuters, Forster said he could not rule out the possibility of further job cuts at Opel or additional shifts in production outside Germany as a result of the weak demand for new cars in Germany.

“To be honest, we’re worried about the volume developments in Europe and in the German market,” he told the news agency, adding that Germany in particular suffered from consumers’ perception that the country was going through a crisis.

“Everybody had counted on a recovery. It will likely be a year of zero growth in Germany,” he told Reuters, referring to the auto industry.