Korean Media: "German Cars Are a Thing of the Past," China's Luxury Car Market Is Undergoing a Major Shift!
On August 17, South Korean media outlet Today's Finance published an article stating that the symbolic significance of German luxury cars in China is waning. Data released by BMW Group shows that BMW's sales volume in China reached 261,773 units in the first half of this year, a year-on-year decline of 20.4%. The drop in the second quarter was even steeper, at 30.2%. Porsche also disclosed internal data indicating its sales in China fell by 32% to 14,501 units during the first half of the year. After aggregating data from various companies, Reuters found that Mercedes-Benz and Audi’s sales in China declined by 28% and 19%, respectively, in the first half of the year.
Chinese consumers are shifting their expectations for luxury vehicles—from an obsessive pursuit of brand heritage and internal combustion engine performance to a focus on software, driving assistance systems, and digital experiences for rear-seat passengers.
According to Global Mobility, a market research firm, only about 5% of BMW’s sales in China come from pure electric vehicles, far below the overall Chinese EV market share of 46%. Chinese companies such as NIO, Zeekr, and Xiaomi have developed new models within just 18 months, led by AI voice assistants and driving assistance features—this development speed is nearly twice as fast as that of traditional automakers.
Price cuts have also failed to work. According to data from Land Rose, a domestic Chinese consulting firm, the average transaction price for BMW vehicles in China last year was approximately 341,000 RMB—lower than that of Chinese domestic premium electric vehicle brands like NIO, AVATR, and BYD Tang. This indicates that the German automotive brand logo no longer automatically signifies high pricing as it once did. It is not that Chinese consumers have abandoned paying a premium, but rather that what they are willing to pay for has shifted—from brand image to technology and user experience.
German firms are accelerating their localization strategies. According to Reuters, BMW has outsourced the development of driving assistance technology for its iX3—specifically designed for the Chinese market—to a local company. Hyundai Motor has adopted a similar approach. Hyundai plans to launch 20 new models in China over the next five years and aims to achieve annual sales of 500,000 units by 2030. Additionally, Hyundai will integrate Momenta’s technology into its electric vehicle Ioniq V, specifically tailored for the Chinese market.
A South Korean industry insider stated: “This shift poses a challenge for Hyundai’s premium brand Genesis. In today’s market environment, even German brands can no longer maintain price premiums based solely on brand reputation. For a latecomer luxury brand to win consumer favor merely through design and the image of being imported is now virtually impossible. The dominant force in China’s premium market is shifting from established brands toward rapid localization and software competitiveness.”
Original Source: toutiao.com/article/1873755243799559/
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