Introduction

Showing Their Cards and Competing Openly

On the first day of 2026, the Chinese luxury car market was rocked by a major announcement from BMW! BMW China officially declared a collective adjustment of the official guide prices for 31 main models, with the maximum reduction directly hitting 301,000 yuan! The most aggressive move came from the flagship all-electric i7 M70L, which plummeted from 1.899 million yuan to 1.598 million yuan—a reduction large enough to buy another Tesla Model Y!

This price adjustment, covering the entire product lineup from fuel-powered to new energy vehicles, and from entry-level to high-performance models, was officially framed as a systemic value upgrade, but it triggered a chain reaction in the market. Behind this move lies BMW's sales pressure, channel dilemmas, and profit expectations, which also align with the transformative trends in the luxury car industry.

A major reshuffling is already underway.

Forced Price Reductions

This BMW price adjustment sets a record among luxury brands in recent years, both in terms of coverage and magnitude. The price adjustments for the 31 models were not a simple across-the-board reduction but a precise strategy of 'larger reductions for high-end models and higher percentage reductions for entry-level models.'

In the flagship lineup, besides the i7 M70L's staggering 301,000 yuan reduction, the all-electric i7 eDrive50L Excellence also saw a direct reduction of 180,000 yuan. The real focus, however, was on the price reductions for core volume models. The domestically produced BMW X1 series directly broke the 300,000 yuan barrier: the fuel-powered X1 sDrive25Li dropped from 316,900 yuan to 258,000 yuan, and the xDrive25Li from 349,900 yuan to 288,800 yuan, representing reductions of 19% and 18%, respectively; the all-electric iX1 eDrive25L fell from its original price of 299,900 yuan to 228,000 yuan, a massive 24% reduction.

Core volume models became the primary focus of this price adjustment. The domestically produced M235L, previously priced at 363,900 yuan, was directly reduced to 298,000 yuan, breaking the 300,000 yuan mark for the first time; the X2 M35i and X1 M35Li also saw reductions of 22% and 18%, respectively, making the once-elusive M performance series now within reach for ordinary consumers. Breakthroughs also occurred in the entry-level sedan market, with the BMW 2 Series Gran Coupe's starting price adjusted to 208,800 yuan, setting a new low for BMW's domestically produced models in China.

It is noteworthy that the officially recommended retail prices for this adjustment have been synchronously updated on BMW China's official website, forming a publicly verifiable pricing system.

Regarding this price adjustment, BMW officially emphasized that it is not a price war but a concrete practice of the 'In China, For China' strategy, an active strategic adjustment in response to market dynamics aimed at giving back to consumers through value upgrades.

However, public data reveals that behind this value upgrade lies BMW's performance pressure in the Chinese market. In the first three quarters of 2025, BMW Group's revenue declined by 5.6% year-on-year to 99.999 billion euros; net profit attributable to shareholders fell by 6.9% year-on-year to 5.712 billion euros. China's market performance became a key factor affecting overall results. According to statistics, in the first three quarters of 2025, BMW delivered a cumulative 465,000 new vehicles in the Chinese market, a year-on-year decline of 11.2%, forming a stark contrast to the global market's slight 2.4% increase.

In the Chinese market, previously popular models have collectively underperformed. The BMW X5's monthly sales hover around 5,000 units, being surpassed by new forces like the Li Auto L9 and Seres M9 in the mid-to-large SUV segment; the mainstay sedan, the 5 Series, also saw monthly sales fall below 10,000 units. In terms of new energy vehicles, although the all-electric penetration rate increased from 16.8% to 18.0%, it still lags significantly behind the domestic new energy market's average penetration rate of over 50%.

BMW Group Chairman Oliver Zipse also stated bluntly at the 2025 Q3 earnings conference that BMW Group's sales in the Chinese market would not achieve rapid growth in 2026 and 2027. This statement reflects the relatively passive position of traditional luxury brands amidst the electrification and intelligence wave. After all, new forces are continuously seizing market share in the 300,000-600,000 yuan luxury car segment with hard strength (solid capabilities) in intelligent cockpits and autonomous driving, while BMW still has room for improvement in terms of technological transformation speed.

Inventory pressure in the dealer channel became a significant driver of this price reduction. Data shows that since the second half of 2025, the inventory coefficient for some of BMW's main models has reached as high as 2.8, far exceeding the industry's healthy inventory line of 45 days. A large amount of inventory ties up dealer funds.

The earlier incidents of Porsche dealerships in Zhengzhou and Guiyang closing down due to operational difficulties undoubtedly served as a wake-up call for the entire luxury car dealer group. This to some extent illustrates that if inventory issues continue to fester, the dealer system may face a collapse risk. In this context, reducing prices to clear inventory is one of the better options.

It is noteworthy that this price reduction action comes just 18 months after BMW's price increase adjustment in July 2024. In the second half of 2024, BMW had raised prices across its entire product lineup under the pretext of 'focusing on business quality,' attempting to alleviate dealer pressure by reducing sales volume. However, this strategy did not achieve the expected results. Under the dual pressure of sales volume and channels, restarting price reductions may be a better choice.

The Butterfly Effect Has Emerged

BMW's large-scale price reductions quickly triggered a butterfly effect in the luxury car market, with competitors beginning to respond passively. Mercedes-Benz dealers directly offered bundled discounts of buying a GLC and getting an A-Class for free, equivalent to an implicit price reduction of 63%; models like the Audi Q4 e-tron and A4L saw their discounts expand to around 150,000 yuan; the Volvo S90 went even further, with its limited-time discount price directly falling below 280,000 yuan.

The price war has spread from the German Big Three to the entire luxury car market. For mainstream luxury brands like Mercedes-Benz and Audi, following suit with price reductions risks damaging brand premium, while not doing so risks losing market share—a dilemma of being caught between a rock and a hard place.

This price reduction has also caused quite a stir in the consumer market, even presenting a polarized situation. On the one hand, potential consumers are delighted. Being able to buy a BMW for around 200,000 yuan and a performance car for around 300,000 yuan has such price appeal that many young consumers have brought forward their car purchase plans.

According to reports, as soon as BMW's price reduction information was released, 4S dealerships' sales hotlines were overwhelmed, with some popular configuration models requiring a 1-2 month wait for delivery. Data shows that after the price reduction announcement, BMW's official website traffic surged by 200% in a single day, and 4S dealership foot traffic multiplied several times compared to before.

However, for recently purchased car owners, this price reduction is not good news. After all, a BMW 5 Series bought for over 400,000 yuan last year now has a bare car price of 260,000 yuan—a loss of 150,000 yuan in just a few months is unacceptable to anyone.

Accelerated Industry Transformation

In fact, BMW's price reduction this time is not an isolated event but a landmark event marking the Chinese luxury car market's entry into a deep transformation zone, indicating that the market is accelerating its shift from brand competition to value competition.

Amidst the electrification and intelligence wave, the brand premium that traditional luxury brands built on mechanical qualities like engines and transmissions is gradually being weakened; intelligent configurations and user experiences have become the new focus of competition. By 2025, China's new energy vehicle penetration rate has approached 60%. With their first-mover advantages in intelligent cockpits and autonomous driving, domestic brands are continuously eroding market share in the 300,000-600,000 yuan luxury car segment, while traditional luxury brands' technological transformation speed cannot keep up with the market's pace.

In fact, luxury brands including BMW have long recognized this trend and begun to Make up for the shortcomings of intelligence (address intelligence shortcomings) through deep localization cooperation. BMW's new generation technology cluster showcased at the 2025 Guangzhou Auto Show is its core trump card in responding to industry transformation. For example, the domestically produced long-wheelbase version of the new generation BMW iX3, planned for mass production in 2026, is equipped with an 800V high-voltage platform, 4695 large cylindrical battery cells, and a self-developed driving control superbrain, achieving a range of over 900 kilometers and recharging 400 kilometers of range in just 10 minutes; it also features an intelligent assisted driving system developed in-depth cooperation with Chinese tech company Momenta, covering full-scenario NOA functions for highways and urban areas, adapting to China's complex traffic scenarios.

This combination of luxury heritage and Chinese intelligence has become the mainstream path for traditional luxury brands' transformation. Brands like Mercedes-Benz and Audi have also followed suit, addressing intelligence shortcomings through cooperation with Chinese tech companies.

Looking ahead to 2026, whether BMW's price reductions at the beginning of the year can reverse its fortunes in the Chinese market remains to be seen. However, one thing is certain: with the continuous increase in new energy penetration and rapid iteration of intelligent driving technologies, the rules of the luxury car market game have been rewritten. Traditional luxury brands need to redefine the connotation of luxury, accelerating technological innovation and localization transformation while adhering to their brand's core values.

For consumers, the price reductions in luxury cars offer more choices, but discerning real value amidst the price reduction wave and avoiding potential risks like configuration downgrades and declining residual values have become new challenges.

The Chinese luxury car market in 2026 is destined to move forward amidst transformation and adjustment. BMW's price reductions at the beginning of the year are just the start of this industry reshuffling, and it is expected that more brands will join the ranks of strategic adjustments in the future.