(Yicai) Jan. 13 -- German automotive giant BMW has trimmed guide prices of 31 models in China since the beginning of this year amid falling sales due to the fierce market competition from domestic peers.

The largest reduction was of the premium i7 M70L electric sedan, whose price was cut by 16 percent or CNY301,000 (USD43,150) to CNY1.6 million (USD229,070), according to BMW China’s website. Meanwhile, the largest cut was for the iX1 eDrive25L electric sports utility vehicle, whose price was slashed 24 percent to CNY228,000.

These price changes are part of BMW’s “regular price management,” the carmaker told Bloomberg on Jan. 7, adding that “final transaction prices are independently negotiated and determined between authorized BMW dealers and customers.”

In fact, Yicai learned from Zhang Yu, the sales manager at a BMW dealership, that the terminal prices of some popular models with tight inventory, such as the 5 Series and X5, increased by CNY2,000 to CNY3,000 (USD287 to USD430) since last month because of the increased foot traffic at the stores.

“The guide price adjustments don’t have a big impact on terminal prices, especially for hot-selling models,” Zhang explained. “For example, a car listed at CNY100 was sold at a 40 percent discount for CNY60 before. Now, the official guide price is CNY70, and is sold at a 15 percent discount, which is still CNY60.”

The essence of the guide price cut is to attract customer traffic, as the final prices for many models are basically the same as at the end of last year, and allow dealers to maintain their profit margins by narrowing the discount range, Zhang noted.

“Dealerships settle payments to the manufacturer based on a percentage of the guide price when picking up cars, so the higher the guide price, the greater the cost,” he added. “After the guide price cut, our financial costs and inventory pressure have indeed been alleviated.”

In addition to BMW, other traditional luxury car brands, such as Mercedes-Benz and Audi, also announced price cuts in China. Discounts on Mercedes-Benz’s popular GLC model and Audi’s A6 can reach up to CNY100,000.

China’s automotive market is undergoing deep adjustments, with new energy vehicles advancing rapidly. Under constant pressure, the high-premium pricing power of luxury brands is weakening.

China’s NEV penetration rate exceeded 50 percent last month, with brands such as Aito and Tesla directly squeezing the core market share of traditional luxury automakers.

The average selling price of luxury cars declined by CNY18,000 (USD2,580) to CNY358,000 last year from 2024, according to data from the China Passenger Car Association.

Editor: Futura Costaglione