BMW loses momentum in China, falling into a gap period between model updates
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BMW’s continued stagnation in the Chinese market has rewritten the global sales landscape for this luxury car brand.
BMW Group recently released its sales figures for the first half of 2026, showing a global total delivery of 1.1567 million vehicles, down 4.2% year-on-year.
The half-year report shows significant regional divergence. Both European and American markets achieved single-digit year-on-year growth; however, the Chinese market recorded 261,800 units, a 20.4% year-on-year decline, with the second quarter alone seeing the drop widen to 30.2%.
Based on automotive sales figures published by BMW Group, the proportion of global sales from the Chinese market fell from a peak of 33.5% to about 25.5%. Over the same period, deliveries in the European region have surpassed those in the Chinese market, making Europe BMW’s largest sales region. This is also the first time since 2013 that the Chinese market is no longer BMW Group’s largest single market worldwide.
BMW is not the only luxury brand under pressure in China.
Mercedes-Benz delivered 210,200 vehicles in China in the first half of the year, a year-on-year decrease of 28%. Audi delivered approximately 218,300 vehicles in China, down about 19% year-on-year. The simultaneous decline of the three major German brands reflects a deep restructuring in China’s luxury car market. As the penetration rate of new energy vehicles secures over 60%, the focus of luxury car competition is shifting further from mechanical performance to intelligent experience.
At the beginning of 2026, BMW implemented official price cuts on more than 30 models, with terminal prices continuing to fall. While this helps clear inventory in the short term, it also compresses brand premium and dealer profit margins.
According to Lan Jielu data, the average price of BMWs in China in 2025 was 341,000 yuan, lower than brands such as NIO, AITO, and DENZA. On July 16, a BMW spokesperson responded by saying that the company had lowered the list prices of some models at the beginning of 2026 and coordinated with relevant departments. However, dealers are not bound by the manufacturer’s suggested prices.
Faced with dual pressures on sales and profits, BMW is placing its hopes in the “Neue Klasse” (New Generation) platform. The Chinese-made long-wheelbase version of the Neue Klasse iX3 will begin pre-sales at the Chengdu Auto Show in August. However, upgrading the product takes time—channel integration and rebuilding of the pricing system during the transition period are currently the most urgent challenges for BMW.
01 Continuous Sales Decline
China was long the key engine for BMW’s global growth. In 2023, BMW’s sales in China hit a historic high of 825,000 units, accounting for nearly one-third of the group’s global sales that year. This structure began to shift afterward. In the first half of 2026, the Chinese market accounted for about 22.6% of BMW’s global sales.
If you look only at the second quarter of 2026, the divergence becomes more intuitive. In the second quarter, Europe delivered 260,000 vehicles, up 7.6% year-on-year, while the US delivered 111,000, up 11.9%. In the same quarter, China delivered just 118,000 vehicles, a 30.2% drop year-on-year, ultimately dragging BMW Group’s global automotive sales down 4.9% year-on-year in Q2.
Jochen Goller, BMW Group’s board member responsible for customers, brand, and sales, also candidly acknowledged that the global market faces many challenges, though BMW’s sales performance in the US and Europe is commendable.
For BMW today, changes in China are enough to reshape the global sales curve.
The problem does not lie solely with BMW. The energy structure of the Chinese automotive market has changed, and BMW’s traditional product advantages no longer guarantee sales.
According to CAAM data, in the first half of 2026, production and sales of new energy vehicles reached 7.438 million and 7.446 million units respectively, up 6.7% and 7.3% year-on-year, with an NEV penetration rate of 49.6%.
According to the China Passenger Car Association, NEV retail penetration has broken through 60% since April and has remained at this high level for three consecutive months. During the same period, the fuel car market has continued to contract, with June retail sales of conventional fuel passenger cars at 600,000 units, down 39% year-on-year.
Against this backdrop, core models of traditional luxury brands are feeling direct pressure.
In the first half of 2026, BMW 5 Series sold a total of 48,000 units, down 19.1% year-on-year; Audi A6L totaled 59,300 units, down 29.7%; Mercedes-Benz E-Class totaled 61,200 units. These three mid- to large-size luxury sedans, which previously enjoyed stable monthly sales above 10,000, collectively slipped to where monthly averages struggle to meet the 10,000 mark. In the same period, domestic high-end new energy sedans performed strikingly well, with all models in the top ten for sales being new energy vehicles.
This contrast points to a key shift.
In the past, consumers chose the BMW 5 Series, Mercedes E-Class, or Audi A6L for brand heritage, mechanical quality, and riding experience. Now, more and more car buying decisions consider capabilities like assisted driving in urban areas, intelligent cockpits, and high-voltage fast charging platforms. These are exactly the areas where Chinese new energy brands are heavily investing and iterating rapidly.
BMW has, in fact, launched EVs—such as the i3, i5, and iX series, all with mature mechanical qualities. The issue is that as the standards for market evaluation change, the traditional luxury brands’ old advantages are being redefined. In the first quarter of 2026, the penetration rate of NEVs in China was 54.1%, whereas for BMW’s NEV deliveries in China it was just 6.2%.
This gap cannot be explained by product capability alone. A more direct reason is that consumers’ understanding of “luxury” has shifted.
Traditionally, luxury was built on advantages in engine, chassis, and transmission mechanical performance; but in the context of electrification and intelligence, chip computing power, software experience, and smart driving capability are becoming new value anchors.
The price dimension pressure is also considerable. According to Jielanlu data, BMW’s average sales price in China in 2025 was 341,000 yuan, lower than that of NIO, AITO, and other brands.
At the beginning of 2026, BMW adjusted the prices of more than 30 core models. At the terminal, the gasoline X1 saw discounts of up to 70,000 yuan, the pure electric i3 up to 160,000 yuan, and flagship i7 up to about 300,000 yuan. While these price adjustments help maintain customer flow in the short term, they bring two side effects: first, lower transaction prices directly erode brand premium; second, dealers’ per-unit profits continue to shrink.
In June this year, BMW lowered its annual performance guidance for the third consecutive year, with its auto business EBIT margin forecast lowered from 4%–6% to 1%–3%, and annual sales expectations from “remaining level with last year” to “slight decline.”
Management cited persistently lower-than-expected demand in China as a key reason—something rarely seen before for a luxury brand so reliant on China for sales and profits.
02 Difficult Transition Period
BMW’s response is not simply to launch new cars, but to first stabilize channels and then wait for the new platform to kick in.
On the dealer side in China, pressure is mounting. Wallstreetcn has learned from channel sources that in the second quarter of 2026, Mercedes, BMW, and Audi almost simultaneously lowered dealer sales targets and wholesale assessments, with some dealers’ tasks reduced by 20% to 24%. For some NEV models, wholesale targets even dropped to 90%.
As of Q1 2026, BMW had 630 dealer outlets in China, 33 fewer than the previous year. The brand is shifting its channel focus from scale expansion to quality and efficiency improvement.
A dealer insider told Wallstreetcn that BMW proactively reduced its wholesale sales targets, lowered its inventory assessment coefficients for dealers, and optimized the rebate payment mechanism to provide stores with direct financial liquidity support.
In terms of pricing strategy, BMW’s “official price cuts” at the start of 2026 attracted broad attention, though the actual effect was not simply a price war or promotional offer. Industry analysts say that BMW’s substantial price cuts are actions to ease dealer cash flow pressure and clear inventory, not simply a price war. After the official guide price reductions, some dealers withdrew previous terminal discounts.
A BMW spokesperson said on July 16 that, following coordination with the relevant departments, the company reduced the sticker prices of some models at the beginning of 2026. However, dealers are not bound by the manufacturer’s suggested price.
This “overt cut, covert stability” approach tries to find a balance between maintaining the price system baseline and stimulating terminal demand. But judging by first-half sales data, this strategy has yet to stop the downward trend.
On the product side, BMW is placing its bet on the “Neue Klasse” platform. According to the plan, Neue Klasse models will adopt brand new electronic/electrical architecture, new-generation intelligent cockpits, and a higher level of electrification.
The first Chinese-made Neue Klasse model—the BMW iX3 long wheelbase version—will use a full-domain 800V high-voltage platform equipped with BMW’s sixth-generation eDrive electric drive system.
This model has entered the final pre-production testing phase and is scheduled to begin pre-sales at the Chengdu Auto Show in August. BMW says that global orders for the Neue Klasse iX3 are about to exceed 100,000 units; the second Neue Klasse model, the BMW i3, has also seen strong demand since pre-sales began.
From July this year, BMW has discontinued production of the i3, i5, and iX1 locally produced pure electric models. These models, based on current platforms, lag behind Chinese brands in terms of range, charging speed, and intelligent features. Discontinuing old-platform models and allocating resources to advance Neue Klasse production comes at a cost—it means BMW will face a product gap in China's pure electric market during this transition.
BMW plans to launch over 40 new or refreshed models by 2027. In 2026 alone, the BMW Group will launch about 20 new or refreshed models in China.
However, in terms of timing, the new Neue Klasse iX3 long wheelbase version will begin pre-sales in August, with true mass deliveries expected after Q4 2026. In the meantime, BMW must rely on its existing product lineup to maintain market presence.
This is also the challenge that Mercedes-Benz and Audi are experiencing. In Q2, Mercedes-Benz’s global pure electric model sales reached 63,000 units, up 50% year-on-year; cumulative pure electric sales for the half year were 97,100 units. Audi is shifting strategy from “volume for price” to “profit retention.” All three German luxury brands are experiencing similar transition pressures, though each is taking a different route.
For BMW, the Neue Klasse platform is the key variable to turn the tide in China, but it must answer not only questions of range and architecture, but also whether it can deliver an intelligent experience at a price point Chinese consumers are willing to pay.
In some sense, the first half of 2026 marks a pivotal moment in BMW’s history in China. The more than 20% sales drop in China is also a reminder for this century-old carmaker: the rules of competition in China have changed.
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