Recently, a sales representative, Xiao Song, from a BMW dealership in the Beijing metropolitan area observed that most customers visiting the showroom are primarily window shopping rather than engaging in test drives or negotiating prices. "It's clear that customer purchase intentions are not very strong," he reported, noting that the anticipated customer influx during the "Silver October" period has yet to materialize.

A visit by reporters to several BMW, Audi, and Mercedes-Benz dealerships in the Beijing area revealed a notable shortfall in customer traffic compared to domestic luxury brands, even on weekends. During weekdays, sales personnel are mainly focused on contacting potential clients and employing online live-streaming marketing strategies to attract customers.

The struggles of German luxury cars in the Chinese market are reflected in their recent sales performances. Data shows that during the first three quarters of this year, the sales of brands like BMW, Mercedes-Benz, and Audi in China all faced varying degrees of decline.

China has become the market where German luxury brands experience the most significant sales declines. BMW reported that despite a global sales increase in the third quarter, the Chinese market saw a downturn. Specifically, BMW delivered 147,100 vehicles in China during the third quarter, a slight decrease of 0.4% year-on-year. For the first three quarters, its cumulative delivery stood at 464,000 units, down 11.2% compared to last year, making China its only market with falling sales. BMW has also admitted that its sales target for China has not met expectations.

Similarly, Mercedes-Benz is facing challenges in China, with third-quarter sales totaling 125,000 vehicles, a drop of 27% year-on-year, while the overall sales for the first three quarters were 418,000, down 18%. This makes China the market with the largest decline in sales for Mercedes-Benz.

Although Audi has not disclosed specific sales figures for the first three quarters, its sales in China during the first half of the year had already dropped by over 10%.

Porsche is experiencing even steeper challenges, with sales in China reaching 32,200 units in the first three quarters, a decrease of 26%. Porsche attributes this decline to a tough market environment, particularly within the fiercely competitive luxury car sector in China.

During a recent visit, Xiao Song's expectations for sales during the holiday period were not met. He expressed that the sales pressure is intensifying, with many potential buyers opting for higher-end domestic brands instead.

The number of customers inquiring about vehicles during this visit was low, and few took test drives. Additionally, there are significant discounts on certain models, with one sales representative from an Audi dealership in the Beijing area mentioning promotional campaigns such as cash rebates on trade-ins. For instance, the Audi Q5L is available at a discount of up to 120,000 yuan, while the Audi A7 can be discounted by 176,500 yuan. Another Mercedes-Benz dealership indicated that many models are enjoying discounts exceeding 100,000 yuan.

In a quieter showroom at an SAIC Audi dealership located within a shopping mall in the Beijing area, sales representative Xiao Wang noted that although foot traffic in the shopping center was decent, most visitors were merely browsing, rarely converting into serious buyers. Live streaming has become an essential tool for engaging customers.

The market share of German luxury brands is increasingly being eroded by domestic brands. Multiple sales representatives voiced their concerns, indicating that there are now more choices in the same price range, making it unnecessary to choose German luxury brands. Some German luxury car owners reported that during trade-ins, they might prioritize electric vehicles and consider features like smart technology.

Within the price range of 200,000 to 400,000 yuan, new competitors such as Tesla, Aito, Li Auto, NIO, Xiaopeng, and Tank have introduced models that rival German luxury cars. In the above-500,000 yuan segment, models from BYD, such as Yangwang and Tank, are also capturing market share.

Domestic brands are competing head-to-head with German luxury vehicles across all price segments, further reducing their market shares. According to Cui Dongshu, the Secretary-General of the Passenger Car Market Information Joint Conference, contemporary vehicles serve not just for transportation but also leisure purposes. Domestic high-end electric vehicles now offer luxurious driving experiences and advanced smart features, significantly expanding in-car space and functionality, while German luxury cars largely retain a straightforward driving experience. Consequently, the substitution of German cars by domestic brands in the high-end luxury vehicle market is becoming increasingly evident.

Recent data from the China Automobile Dealers Association shows that the retail market share of German brands has dropped from 18.4% in January to 14.3% by September this year. In September, the retail share of luxury brands was 10.8%, a year-on-year decline of 0.8 percentage points.

The pace of electrification still needs to accelerate. In terms of electrification and intelligent features, German luxury brands are still relatively weak in the Chinese market, with sales of electric models needing improvement. For example, the sales figures for the BMW iX3 and iX1 have remained around 1,000 units per month over the first nine months of the year, with sales of the iX3 in September falling below 100 units.

Sales representatives have indicated that transactions primarily feature fuel vehicles, as consumer perceptions still lean towards internal combustion engine models.

Veteran automotive analyst Mei Songlin identified three main pressures on German luxury cars: first, a sluggish transition towards intelligent electrification, with strong competition from emerging luxury brands such as Tesla, NIO, Li Auto, and Aito invading traditional luxury markets; second, increased caution among consumers regarding luxury car purchases; and third, the poor cost-performance ratio of luxury vehicles, causing some potential buyers to adopt a wait-and-see approach.

Nonetheless, German luxury brands are hastily evolving in the Chinese market. BMW's new generation iX3 is set to be localized next year; Mercedes-Benz has mentioned launching more electric models like the electric GLC and electric C-Class that cater to domestic market needs; and Audi has unveiled the first Chinese special long-wheelbase model under its PPE electrical platform, as part of its new electrification brand AUDI. In terms of intelligence, BMW, Mercedes, and Audi have each formed collaborations with local tech firms.

Facing the global wave of electrification, German brands are adjusting their electric strategies, such as Audi reversing its plan to cease research and sales of internal combustion engine vehicles by 2033, and no longer establishing a clear timeline for phasing out these engines. From 2024 to 2026, Audi plans to launch new internal combustion and plug-in hybrid vehicle series. Both BMW and Mercedes-Benz are also revising their 2030 electrification strategies; BMW is reviving its range-extender hybrid technology.

To maintain stable development, Mei Songlin emphasized that luxury brands must uphold their brand image by solidifying their technology, products, and services. They should also stabilize their core customer base. Moreover, resources should be allocated efficiently in the Chinese market, such as leveraging the advantages of the Chinese supply chain for traditional fuel and new energy vehicles and developing localized products targeted at the domestic market.