DETROIT -- Volkswagen AG, Europe's largest car maker, will not increase incentives in the United States even as sales decline, as the company tries to improve its image, chief financial officer Hans-Dieter Poetsch says.

Volkswagen has the second-lowest incentives of any major car maker, according to CNW Marketing Research. Volkswagen offers an average $1,406 (U.S.) discount. General Motors Corp., Ford Motor Co. and DaimlerChrysler AG offer rebates in excess of $4,000.

Volkswagen refuses to offer incentives at the same level of competitors because it would hurt the resale value of the cars at a time when Volkswagen is seeking to move its brand upscale. It began selling the Touareg sport-utility vehicle in the United States last year and the Phaeton luxury model will be sold in the United States this year.

"It's a contradiction to raise incentives while following a premium strategy," Mr. Poetsch said yesterday in an interview at the North American International Auto Show in Detroit. "We can't match the level of incentives offered by our competitors, but we're not happy with losing volume."