The commercial vehicle chiefs of two of Britain’s biggest van manufacturers have warned that huge discounting of front-end prices will affect customer investments and destroy residual values.

As sales of vans up to 3.5 tonnes go into freefall this month – down 27% year-on year and 42.8% down in March – some manufacturers are discounting their prices in a bid to gain extra sales.

But Simon Elliott, director at Volkswagen Commercial Vehicles, said: “Unlike some of our rivals, we have steered clear of distressing our brand by resorting to offering huge discounts in the public arena which destroy residual values and the customer’s investment. Instead we have tried to help our customers with competitive and flexible ways to finance a purchase of a new or used vehicle and continued to develop the comprehensive support our Van Centre network provides.

“When the economic climate is gloomy, the strong residual values, competitive wholelife costs, durable vehicles and the professional support of the Volkswagen Van Centre network are more attractive then ever.

"Volkswagen is a really durable, reliable and desirable brand, so we have a good foundation on which to build.”

Steve Kimber, Ford commercial vehicle director, added: “There is always a time and a place for discounts, but wholesale discounting destroys the brand and destroys the market by bringing down residual values.

"This sort of thing may work in the short-term but it is not sustainable.”

Kimber’s refusal to go down the discounting route appears to be bearing fruit, as the company reported a rise in market share in March, up to 28.8%, making a total of 10,136 vans sold.

It is Ford’s highest market share since November 2000, when it took 30.4%.

The warnings come at a time when Citroen has launched a new range of spring offers, which see up to £7,105 slashed off the price of its vans.

Citroen has also seen a relatively strong performance in the current dismal climate, regaining its third place slot in the van sales charts after losing it to Volkswagen late last year and selling 4,008 units in the first quarter of 2009, giving an 8.05% market share.

Charles Peugeot, head of commercial vehicles at Citroen, said: “We are confident that we can maintain this solid LCV sales performance through the second quarter with this range of attractive customer offers.”