BMW has initiated a new round of price reductions at the start of 2026, with discounts of up to 300,000 yuan available on more than 30 models. The company, however, insists this is not a price war but rather a value upgrade for certain products.
The price cuts affect a wide range of vehicles from flagship to entry-level models. For instance, the flagship i7 M70L now starts at 1.598 million yuan, down 301,000 yuan from 1.899 million yuan, marking a 15.9% reduction. The entry-level BMW iX1 eDrive25L sees its suggested retail price drop from 299,900 yuan to 228,000 yuan, a decrease of 71,900 yuan or 24%.
BMW's official website in China has already been updated to reflect these new pricing adjustments. In response to the move, BMW stated that this is not a price war but an enhancement of product value. The company described it as a proactive strategy adjustment in response to market dynamics, emphasizing its commitment to long-term, healthy development over short-term profits.
It is important to note that these are adjustments to the manufacturer's suggested retail price. Typically, dealerships determine their final selling price based on market conditions. While the two price systems are related, they are not identical. In recent years, due to sales pressures, the final prices offered by BMW dealers have often been significantly lower than the manufacturer's suggested prices.
Currently, the final prices offered by dealerships for most models have not decreased in proportion to the manufacturer's price cuts and have remained relatively stable for the time being. Nevertheless, this situation presents a significant sales opportunity for BMW's 4S stores. Sales personnel are promoting the discounts as a dual benefit from both the manufacturer and the dealership, suggesting it is an opportune time to purchase a vehicle.
Behind this major price reduction lies performance pressure on BMW. In the first three quarters of 2025, BMW Group's revenue and net profit both declined, and its sales volume in the Chinese market fell by 11.2% year-on-year. BMW Group Chairman Oliver Zipse has explicitly stated that the group does not expect to achieve rapid sales growth in the Chinese market in 2026 and 2027.
Interestingly, in July 2024, there were reports that BMW China would exit the price war. At that time, prices across the BMW brand's entire product line were adjusted upwards to varying degrees. A BMW China representative responded then that the focus for the second half of 2024 would be on business quality, supporting dealers to consolidate their operations steadily.
However, the price increases did not last long. Under pressure from sales and performance figures, BMW China has now found it necessary to reduce its suggested retail prices. Recently, BMW Group released its results for the first three quarters of 2025. During this period, the group's revenue was 99.999 billion euros, a year-on-year decrease of 5.6%, and its net profit attributable to shareholders was 5.712 billion euros, down 6.9% year-on-year.
In terms of sales volume, the BMW Group's global vehicle deliveries in the first three quarters reached approximately 1.7957 million units, a year-on-year increase of 2.4%. The penetration rate of pure electric vehicles also rose from 16.8% in the same period last year to 18.0%. However, the group faced challenges in the Chinese market. In the third quarter of 2025, BMW's sales in China were 147,000 units, a slight year-on-year decrease of 0.4%. For the first three quarters, sales in China totaled 465,000 units, representing an 11.2% year-on-year decline.
In its third-quarter report, the BMW Group identified intensified competitive pressure in China as the primary reason for its profit decline. Chairman Oliver Zipse stated during an earnings call that the group is prepared to address the continuously changing environment in China, whether by adjusting its dealer network or launching new models that better meet the needs of Chinese consumers.
Comments