Desperate to regain lost market share in the HD TV market, Sony is this weekend offering a 40″ Sony Bravia 200Hz TV for $1,895, according to advertising in national newspapers. The deal also includes a free $499 Slim Sony PS3.

The move comes after Sony’s share of the Australian flat panel TV market slumped from 32% at the start of the year to 14% in August 2009. Their latest offer is expected to catapult them back into the #1 slot.

Competitors to Sony are giving away free TV’s, home theatre kits, Xbox 360 consoles and BMW’s in an escalation of a brutal HD TV war running into Xmas.

The decision by Sony to lower prices comes as the company moves to low cost manufacturers in China and Taiwan to make their Bravia LCD TV’s. They have also been forced because of massive losses, to license LCD TV technology from the likes of Vizio, the #1 US TV brand.