Primary Taiwanese news agency Central News Agency (CNA) recently reported that China’s auto market has been in serious trouble, and German luxury car brand BMW has been actively cutting prices since last year to maintain its market share. It now seems that BMW China will withdraw from China’s price war and adopt a new strategy of “volume reduction for price protection.” This became the hottest topic on Chinese social media at one point a few days ago.
According to local media reports, BMW China has been actively cutting prices. The average discount rate on BMW sales in 2023 was 17.66 percent. BMW delivered 825,000 vehicles last year in China, an annual increase of four percent. These delivery numbers came at the cost of a sharp decline in BMW’s profits, which fell more than 30 percent year-over-year.
In the first half of this year, BMW sold 375,947 vehicles (including the Mini brand, which is owned by BMW), with sales down four percent year-over-year. Now, price cuts are hurting both profit and sales. A BMW China salesperson revealed that the prices of all models will be adjusted upwards starting from July 10, and there will be another price increase after July 15. All previous price-cut offers will be cancelled.
Another German luxury car brand, Mercedes-Benz, has also entered the price war. Mercedes sales in the first half of the year also fell by nearly six percent. Mercedes has not made any official remarks regarding its pricing strategy. Meanwhile, Porsche sales China in have been even worse. In the first half of the year, Porsche sales in China totaled only 29,551 units, a 33 percent decrease from the same period last year.
Source: CNA, July 12, 2024
https://www.cna.com.tw/news/acn/202407120327.aspx