Volkswagen is gearing up to heavily promote and discount its premium models, including Passat, Touareg and Phaeton.

According to Automobilwoche, Volkswagen is responding to the threat to the Passat from the launch of a new Ford Mondeo and Mercedes C-Class this year by offering dealers a bonus of EUR2,000 on each car sold. This is designed to give dealers more flexibility in negotiating discounts with new customers who are also considering an alternative brands. The popular estate version of the Passat will be subject to a bonus of EUR1,500.

According to internal documents, Volkswagen will offer a bonus of EUR2,000 on the Touareg, in the form of some kind of loyalty incentive. A EUR3,000 bonus will be available for leasing agreements for the Phaeton, designed to persuade leasing customers to choose the Phaeton instead of the Mercedes S-Class or BMW 7-series.

After is failure to sell low emission vehicles in the past, in particular the the three litre Lupo, Volkswagen is also incentivising sales of the Polo BlueMotion. Fleet customers are being offered a EUR600 discount on the model.