Elie Chauvin stopped in his local Hyundai showroom with no intention of buying a new car, but ended up leaving with two for the price of one.

The retired builder in Nimes, France, took advantage of a remarkable offer from the South Korean car-maker - buy a new ix35 crossover utility vehicle and get an i10 mini thrown in for €1.

The ix35 normally retails for €29,619, while the i10 costs in the region of €10,120, meaning that Mr Chauvin saved 25% on his purchase.

This offer is just one example of the widespread discounting across Europe as car manufacturers attempt to fight the decline within the industry which has seen the market shrink for the sixth year in a row to a two-decade low.

In May 2013, the average discount available on a new car across Europe’s five biggest markets was €2,518. Although the decline in the market is showing signs of slowing down, this price competition is threatening to kill any sense of relief among manufacturers who are struggling with excess plant capacity.

With the exception of the powerful Volkswagen Group and its German luxury peers in BMW and Mercedes almost all manufacturers are losing money in the European market.

Regional losses for the Fiat group amounted to €704m in 2012, while both Ford and General Motors lost almost €1.4bn each.

These losses pale in comparison to those suffered at the euro-centric Peugeot Citroen group, who posted a scarcely believable €5bn loss in 2012.

While some manufacturers, concerned for their brand image, are masking their price slashing by registering some of their own vehicles to sell as used other’s like Hyundai are becoming more brazen with their discounting.

Recently in Spain the South Korean company pledged to refund one car loan instalment of up to €150 for each of the first 15 goals the Spanish national side scored at the Confederations Cup. “Spain scores, you win” was the Hyundai slogan, and given that Spain managed to score ten goals in a single game against Tahiti it is fair to presume there were a number of winners across Spain.

More established car brands are also engaging in similar discount offers. Toyota have recently responded to Hyundai’s discounts by offering €5,000 worth of extras - including alloy wheels, parking cameras and refrigerated glove boxes - all for €1.

Optimism is growing within the sector that car sales volumes may be nearing the end of their slide. Ford is boosting Spanish production of its Kuga SUV by 10%, while Volkswagen has asked workers to cut their holidays short in order to increase output of Golf hatchbacks.

"Anecdotal evidence from the European suppliers indicates that European production levels troughed in the second quarter and have now begun to improve," Goldman Sachs analyst Stefan Burgstaller told investors in early July.

However any green shoots of recovery are threatened by the kind of discounting that convinced Elie Chauvin to bring forward purchases they would otherwise have made in years to come.

Anil Valsan, lead analyst at Ernst & Young’s global automotive practice says that the biggest concern is that this won’t hold, claiming that car manufacturers will have to rein in their discounts sooner or later, triggering another sales decline "within the next few months".

Mr Valsan claims that while these incentives remain in place "any bottoming out [of sales] will be artificial".

Of the discounters, the General Motors group are among the most generous across the five major markets of Germany, Britain, France, Italy and Spain. Cash rebates for its Opel brand reached €3,301 per vehicle in January-May 2013.

Of the other major brands, Ford’s incentives stand at an average of €2,632, while Renault offer a slightly below average €2,291. Struggling Peugeot have increased their discounts in response to the groups overwhelming losses with €3,013 offered at the namesake brand and a whopping €3,429.

All of this amounts to bad news for the car makers, but great news for families like the Chauvin’s. Elie traded in a 25-year-old Renault with his unplanned car purchase, and now plans to sell his 2007 Hyundai Santa Fe SUV.

"My wife was delighted; she said she'd love a little car," he said. "When I try to tell other people I got both vehicles for that price, they just laugh at me."