Recently, BMW China withdrew from the price war and will stabilize prices by reducing sales volume from July to ease the operating pressure of stores. According to terminal market news, traditional luxury brands including Mercedes-Benz and Audi have also followed suit to end the "price reduction to maintain market share" strategy.

According to the Red Star Capital Bureau on the 17th, Volkswagen, Toyota, Honda, Volvo and other brands have decided to adjust terminal policies from July, reduce terminal discounts, or no longer further reduce prices.

It is worth mentioning that some dealers, including Nissan, Mercedes-Benz and Audi, said that they have not received formal notices from the brand to adjust prices, but will adjust dynamically according to market conditions and have a positive attitude towards "reducing volume and stabilizing prices".

BMW China also said 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.

According to e Company on the 17th, some industry insiders analyzed that the public opinion effect brought by BMW's announcement of withdrawal from the "price war" is stronger than actual actions. Judging from the data in the first half of the year, although BMW's sales in China have declined, it still exceeds Mercedes-Benz and Audi overall. It is expected that BMW will guide dealers to flexibly adjust prices according to market changes, and it is unlikely that there will be no price cuts at all.

An informed source close to BMW dealers revealed that under the price war, it is expected that the three luxury brands BBA (BMW, Mercedes-Benz, and Audi) will lose about 500,000 sales in the Chinese market in 2024.

According to terminal market news, traditional luxury car brands including Mercedes-Benz and Audi have also followed up to end the "price reduction to maintain market share" strategy.

A salesperson at a Mercedes-Benz 4S store said: "Every C-class car sold will lose 70,000 yuan, and this situation will definitely not continue. At present, the price of Mercedes-Benz is still in a relatively stable state, and it will definitely increase in the future."

In addition, an Audi dealer also said that the prices of the main selling models including Audi Q5L, Audi A6L, and Audi A4L have all increased slightly, and they may continue to increase in the future, but the increase will not be too large.

This means that BBA is about to withdraw from the "price war" completely.

Why withdraw from the "price war"?

In the first half of this year, luxury brands including BMW, Mercedes-Benz, and Audi have launched "price wars". But the crazy price cuts did not bring sales growth. According to the sales data released by the BMW Group, in the first half of this year, BMW's global deliveries reached 1.0965 million vehicles, a year-on-year increase of 2.3%, but its sales in the Chinese market declined to 375,900 vehicles (including the MINI brand), a year-on-year decline of 4.2%.

It means that it seems very difficult to exchange prices for the market. At the same time, continued and substantial price cuts will undoubtedly cause huge losses to the brand value of luxury cars.

Analysts pointed out that another consideration for BBA to withdraw from the price war is to maintain brand value. In recent years, independent brands have risen rapidly and have been continuously increasing their market share in many fields including the luxury car market, which has brought huge challenges to traditional luxury brands such as BMW. If a certain amount of sales are abandoned, the value of luxury brands can be maintained, which is a feasible option for long-term development.

It is worth mentioning that the sales of other international luxury car brands in the Chinese market are also declining, among which Porsche's downward trend is particularly obvious. According to its latest data, in the first half of 2024, Porsche delivered a total of 155,900 vehicles worldwide, a year-on-year decline of 7%. Among them, the delivery volume in the Chinese market was 29,600 vehicles, a year-on-year decrease of 33%, far exceeding the average decline in the global market.

In this regard, Porsche explained that this result was mainly due to factors such as the price-oriented Chinese market.

The industry believes that the price war will ease in the second half of the year and the price of luxury cars will stabilize

Since July, the number of car companies announcing promotions has decreased significantly, and the intensity of promotions has been greatly reduced. The industry generally believes that the price war will ease in the second half of the year.