How about this?
I regret to inform you that I will not accepting your local sales manager position.
The conditions you proposed seemed really attractive; however, my current employer offered me a promotion which I could not refuse. Last week I was promoted to the position of product manager. As far as I know, there are no similar vacancies in your company.
To my mind, it was the best possible promotion I could hope for taking into account my overall experience. From now on, I will be responsible for market analysis and product development of high-end data storage systems. This is an area that I have dreamed of working in for a long time.
Anyway, I am grateful to you for your attention to my CV and for the time you spent on interviewing me. I would be pleased to work with you in the future for a higher-level position.