Recently, the topic of "BMW China will withdraw from the price war" has become a hot search.

In response, BMW China stated that in the second half of the year, BMW will focus on business quality in the Chinese market and support dealers to make steady progress. Although it did not directly admit it, this statement has proved BMW's current attitude.

It can be said that under the increasingly fierce price war in the domestic auto market, BMW has changed its mind and no longer pursues the market share of luxury brands to avoid affecting the healthy development of enterprises and dealers.

Since the Spring Festival in 2023, the price war in China's auto consumer market has intensified. Although it has eased during the period, the overall situation remains severe. Many car companies choose to seize market share with a low-price strategy, resulting in a serious "involution" phenomenon in the industry.

But what many people don't realize is that although too low a price can attract consumers, it also brings many hidden dangers: reducing the profit margins of various links in the industrial chain will eventually affect the quality of products and services. For consumers, the cheaper the car, the better. You get what you pay for. Behind the too low price, there may be invisible risks.

In fact, BMW has never been very interested in the price war model. Although they are not interested in price wars and even feel a little disgusted, BMW's new energy models have taken the lead in starting a big price cut mode after entering 2024. According to reports, the BMW i3 model with an official guide price of 353,900 yuan has started a 50% discount, and the price is directly "cut in half".

Not only new energy vehicles, BMW's price collapse has already spread to the field of fuel vehicles. The price of the BMW 5 Series, which was launched at the beginning of this year, was once discounted by more than 120,000 yuan at the terminal. The official guide price of the 525Li luxury package was 439,900 yuan, and the dealer quoted only 329,900 yuan. The 530Li model has a larger discount.

"Small profits but quick turnover" is not undesirable, but BMW's "small profits but quick turnover" has already shown problems.

Data shows that BMW's sales in China in 2023 will be 825,000 vehicles, a year-on-year increase of 4.2%. According to the data released by BMW a few days ago, the BMW Group sold a total of 1.2134 million new cars (including BMW, MINI, and Rolls-Royce) in the first half of this year, a year-on-year decline of 0.1%, of which the BMW brand increased by 2.3% year-on-year to 1.0965 million. However, it should be noted that BMW's sales in the Chinese market declined significantly during the same period. In the first half of the year, BMW China's cumulative sales were 375,900 vehicles (including BMW and MINI brands), a year-on-year decline of 4.2%.

Although this result is ahead of its old rivals Mercedes-Benz and Audi, it is not meaningful for BMW to continue the price war after the growth rate slows down. Price reduction to maintain volume is a double-edged sword. It can increase market sales in the short term, but it will also damage the brand image. In this case, BMW's decision is completely understandable.

It is certain that after actively withdrawing from the price war, the terminal price of BMW's vehicles sold in China in the future will inevitably rise compared to before. With BMW's current brand appeal, whether users can continue to buy BMW products under the premise of price recovery can only wait for time to verify.

Nowadays, cars have officially entered the era of electrification and intelligence. The gap between domestic brands and traditional luxury brands has been sharply narrowed, the moat of luxury brands has been breached, and the brand premium of traditional luxury brands has disappeared in the new energy era. More young consumers are unwilling to pay for brand premiums, and instead prefer intelligent configurations and pay a premium for a better experience.

It should be noted that in April this year, the BMW Group announced an increase of 20 billion yuan to carry out large-scale upgrades and technical updates to the production lines of the Shenyang Dadong Plant, and will produce the "Neue Klasse" (new generation) series of electric vehicles. This is another major investment after BMW announced in November 2022 that it would invest 10 billion yuan to expand its Shenyang power battery production base.