Traditional Luxury Gas Cars Losing Market Share to Domestic Brands: Is 400,000 RMB the Dividing Line Between Old and New Luxury Car Forces?

As electrification progresses, traditional luxury internal combustion engine (ICE) vehicles have reached a crossroads.

Official data shows that in the first half of this year, sales of several luxury brands in China, including BMW, Mercedes-Benz, and Audi (BBA), have declined. Data from the China Automobile Dealers Association (CADA) Passenger Car Association also indicates a significant drop in the number of imported vehicles, especially luxury cars, during the same period.

While traditional luxury brands are experiencing declining sales, new energy luxury vehicles are catching up, with domestic brands' luxury models gaining more market share. In the sales rankings, new energy luxury cars are occupying more spots in the 300,000 to 400,000 RMB price range. The market landscape for traditional luxury ICE vehicles is being reshaped.

Looking back over the past decade, imported vehicles have seen dramatic fluctuations. According to CADA data, China's imported vehicle volume peaked at 1.43 million units in 2014. However, after this peak, imports began to decline. Cui Dongshu noted that while import growth saw a slight recovery in 2016-2017, the downward trend has continued since 2018.

By 2024, annual imported vehicle volume had dropped to just 700,000 units, down 12% year-on-year. "The pressure of shrinking imports remains significant," Cui Dongshu stated. Among imported brands, mainstream players like Toyota, Volkswagen, and Subaru have seen sharp declines, with luxury brands now dominating the import market.

In the first half of this year, Lexus was the only imported brand to achieve positive growth, with retail sales exceeding 91,000 units, up 8% year-on-year. Meanwhile, other mainstream luxury brands saw sales plunge by over 60%, with some nearing 100%.

Even when including locally produced models, traditional luxury brands are struggling in the Chinese market.

Official figures reveal that in H1 2024, BMW delivered 317,900 new vehicles in China, down 15.5% YoY; Mercedes-Benz delivered 293,200 units, down 14% (with a 19% drop in Q2); Audi delivered 287,600 units, down 10.2%; and Porsche delivered just 21,000 units, a 28% decline.