Summary of Key Points
Recently, traditional luxury car brands such as Mercedes-Benz, BMW, and Audi (BBA) have significantly reduced their official prices in response to the threat from new energy vehicles. The discounts offered at the dealership level have also reached record levels, leading to a rapid disruption of their pricing structures. These brands are shifting their price ranges towards more affordable segments (for example, the previously expensive 5 Series, E-Class, and A6L models are now priced between 300,000 and 400,000 yuan). Nevertheless, their sales volumes have still decreased by approximately 20% year-on-year. Meanwhile, domestic new energy vehicles (such as WENJIE and JIKR) have entered the core price range of luxury cars (300,000 to 600,000 yuan), presenting traditional luxury brands with multiple challenges in terms of market presence and intelligence.
Detailed Analysis
1. How drastic are the luxury car price cuts?
The price reductions by traditional luxury car brands are not minor; they involve a combination of official price cuts and additional discounts at dealerships:
- Official price cuts: At the beginning of this year, BMW adjusted the prices of 31 models, with some seeing reductions of up to 301,000 yuan. Mercedes-Benz reduced the prices of all its models by around 10%. The starting price of the new A6L model was lowered from over 400,000 yuan to 322,900 yuan (a reduction of 100,000 yuan).
- Dealership discounts: BMW's 5 Series is available for nearly 100,000 yuan off (the 525Li model with a guide price of 368,000 yuan can be purchased for 280,000 yuan when financed). Some models of the Mercedes-Benz E-Class are discounted by 200,000 yuan, and the A6L is discounted by 170,000 yuan. Even high-end models (such as the BMW 7 Series and imported versions of the Mercedes-Benz GLE) are offered with discounts of over 200,000 yuan.
- Additional benefits: Consumers can also take advantage of financial incentives (lower loan interest rates) and special subsidies for key customers (employees of collaborating companies receive additional discounts ranging from several thousand to 10,000 yuan), resulting in even lower actual purchase prices. In other words, the money that used to buy a basic 3 Series model is now enough for a lower-tier 5 Series model; what used to cost 400,000 yuan for a 3 Series can now be obtained for just over 200,000 yuan.
2. Why are the prices suddenly dropping so much?
The fundamental reason for these price cuts is the intense competition from new energy vehicles:
- New energy vehicle penetration rate exceeds 50%: Brands like WENJIE and Tesla are directly competing with luxury cars for customers. In the first half of this year, BBA's sales volumes in China decreased by around 20% (BMW: 262,000 units; Audi: 233,000 units; Mercedes-Benz: 210,000 units). Models that were once easy to sell (such as the 5 Series and E-Class) are now struggling.
- The luxury brand's competitive advantage is diminishing: In the past, consumers bought luxury cars for prestige. However, domestic new energy vehicles offer better features in terms of intelligence (such as OTA updates and autonomous driving), making the luxury brand's premium value less appealing.
For example, buying a BBA car used to be a symbol of status; now, owning a WENJIE M7 or JIKR 001 is also prestigious, with higher specifications and more affordable prices.
3. Luxury cars are shifting their price ranges downward
The price ranges of traditional luxury cars are generally moving lower:
- Mid-to-large models (5 Series/E-Class/A6L): Prices have dropped from over 400,000 yuan to between 300,000 and 400,000 yuan.
- Medium-sized models (3 Series/C-Class/A4L): Prices have dropped from around 300,000 yuan to around 200,000 yuan.
- Data support: Last year, all Mercedes-Benz E-Class gasoline models were priced between 400,000 and 500,000 yuan; this year, their prices have also been lowered to the same range, and sales volumes have even increased. The sales volume of the BMW X3 in the 300,000 to 400,000 yuan segment has decreased, but overall sales have risen because many units are being sold in the 250,000 to 300,000 yuan range. This indicates that luxury cars are beginning to compete with mid-range vehicles, making the 300,000 to 400,000 yuan segment more crowded with both discounted luxury cars and domestic models.
4. Difficulties for luxury car dealers
The price cut trend is putting significant pressure on luxury car dealers:
- Sales volumes halved: Small and medium-sized dealers used to sell over 100 units per month; now, they only manage around 50 units.
- Dealerships closing or transitioning: Many 4S stores are either closing or converting to sell new energy vehicles (such as WENJIE and LI AUTO). Since 2025, numerous luxury car dealers have made this transition.
- High costs: Large stores face high rent and labor costs, which they pass on to consumers through higher prices. However, with consumers being more price-sensitive, dealers prefer to operate smaller outlets.
- Conflicts with manufacturers: Manufacturers want to increase sales through price cuts but are concerned about damaging the brand's image (for example, a BMW that used to be considered high-end is now available for just over 200,000 yuan, which may affect the loyalty of existing customers).
5. Accelerating replacement by domestic brands
Domestic new energy vehicles are gaining traction in the luxury car market:
- Penetration in price ranges: Domestic new energy vehicles are becoming more prominent in the 300,000 to 600,000 yuan range. Models like the WENJIE M7 and JIKR 8X are competing for sales in this segment. In the 400,000 to 500,000 yuan range, domestic new energy vehicles have already established a significant presence. There are also domestic models available in the 500,000 to 600,000 yuan range.
- Slow transition by traditional luxury brands: Although BBA has launched electric vehicles, their visibility is low, and they lag behind domestic new players in terms of intelligence (for example, slower OTA updates and inferior voice recognition systems compared to WENJIE and LI AUTO).
However, it remains uncertain whether domestic new energy vehicles will be able to maintain their presence in the 600,000 yuan range and whether the sales surge in the second quarter of this year will continue into the second half of the year.
Conclusion
The "price myth" surrounding traditional luxury cars is being shattered, with new energy vehicles being the main driving force behind these changes. In the future, either traditional luxury brands need to catch up with domestic new players in terms of intelligence or continue to cut prices to maintain sales volumes, which may further erode their brand value. Domestic new energy vehicles are steadily gaining a foothold in the high-end market, reshaping the luxury car industry. For consumers, buying a luxury car is now more cost-effective, but they must also be aware of the potential depreciation of the brand's value. For the industry as a whole, this represents a critical period of transition between old and new players.