RENAULT and Citroen are undermining industry efforts to stablise new car prices by slashing the cost of some of their models by up to £5,000. In some cases the deals represent more than 25% discount on new prices.

John Lawson, motor industry analyst at Salomon Smith Barney, said: 'A 10% decline in prices for volume cars in the UK is increasingly realistic.' Thirteen members of the 19-strong Renault UK-owned Renault Retail Group are advertising V-plate Clio, Megane and Laguna models for sale at prices discounted by up to £4,800 in a bid to sell more than 1,000 cars which were registered last month.

A Renault spokesman said the cars were 'demonstrators' with the offer seeing the price of a Laguna V6 Monaco cut by £4,805 to £17,995, a Laguna 1.6 RT cut by £4,305 to £9,995, a Megane Coupe 1.4 Sport cut by £2,805 to £10,995 and a Clio 1.6 RXE cut by £2,505 to £8,995. A Fleet NewsNet inquiry revealed that Renault had 1,200 vehicles of all specifications to sell which had been pre-registered by dealers in order to meet sales targets. One salesman said: 'If it looks as if we are going to miss our sales target we register the vehicles so we meet the target and get our bonus. All dealerships in the network pre-register a couple of cars each month, but on this occasion there are 1,200 in the network we want to sell.'

Meanwhile, Citroen is offering small fleet and retail buyers £2,500 cashback on the Xsara for all models registered before the end of the month as part of what it officially calls its autumn sales campaign. But an insider said it had been introduced to combat manufacturers who were selling cut-price V-plate vehicles pre-registered in September with delivery mileage only.