Direct Online Auto Dealer Quelle Stops Selling VW Golf

FRANKFURT, Feb 8, 2004; Reuters reported that German retailer KarstadtQuelle AG said on Sunday its mail-order segment will stop selling Volkswagen AG's new Golf model on the Internet due to flagging demand.

"We are not satisfied with the demand for the new Golf, other (manufacturers') models are selling better," said a spokesman for the mail-order division, Quelle.

Welt am Sonntag newspaper reported that Quelle will instead concentrate on selling the new Opel Astra, made by General Motors' German unit Adam Opel AG and due to be launched in mid-March.

Pre-sales of the Astra on the Internet will start at the end of the month, Welt am Sonntag reported. The Quelle spokesman declined to comment on the Astra or the timeframe.

Quelle began selling the Golf last September at a 10 percent discount but Welt am Sonntag said that instead of expected sales in three figures, a mere 30 Golfs were sold over the Internet.

The spokesman declined to say how many Golfs were sold.

Quelle's online service, offering new and second-hand vehicles, sold cars from makers including Ford, Nissan and DaimlerChrysler. In the past year, some 300 autos were sold through the Internet, the company spokesman said.

Volkswagen rattled investors last week as many feared a fresh price discount indicated sluggish demand for the company's main revenue-generating Golf V series.

Buyers for the new Golf V model will be offered car air-conditioning units, worth around 1,225 euros, for free. The offer may eventually filter through to around 350,000-400,000 units.

Analysts said the fresh incentive will put further pressure on Volkswagen's margins while the group could also expect stepped-up competition for the Golf in its domestic market from the March launch of the new Opel Astra.

Deutsche Bank on Wednesday cut its earnings estimates and price target for Volkswagen due to worse-than-expected pricing pressure on the new version of its Golf.

The Golf is VW's best-selling model and is key to its aim of lifting profits again after a sharp fall in 2003.