Luxury car companies are quietly changing their top executives, marking the end of strategies that have lasted thirty years.

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Author | Zhou Zhiyu

Three months ago, Duan Jianjun was still the head of Mercedes-Benz China—the first Chinese CEO of Mercedes-Benz in the country. On February 14, Mercedes-Benz announced he was stepping down for personal reasons, replaced by Christoph Liedtke from German headquarters.

On May 11, Duan Jianjun appeared in Volvo’s appointment announcement, becoming President and CEO of Greater China, taking office immediately.

Ten years ago, this would have been almost impossible. At that time, leadership changes in China’s management for foreign luxury brands were infrequent, routine rotations, each adjustment requiring lengthy internal deliberation.

But in the past five months, luxury carmakers in China have completed an almost synchronized organizational restructuring. BMW, Mercedes-Benz, and Audi collectively replaced their China head within a month; Jaguar Land Rover’s China CFO Tim Howard succeeded as China CEO.

The just-released quarterly reports explain the urgency. Mercedes-Benz China’s Q1 sales fell 27% year-on-year while North America grew 16%; BMW China dropped 10%, but Europe grew 3%. The same product lines performed well in other global markets, but only in China are they accelerating into decline.

The first question facing the new management is very concrete: In China, how to sell cars again.

The Old Model Has Failed

BMW CFO Walter Mertel said in the May 6 earnings call: After adopting the new generation platform and Momenta intelligent driving solution, “we will be on par with competitors in the Chinese market.”

A global luxury brand’s CFO openly admits their products need to catch up with Chinese competitors. Behind this is a fundamental shift in how luxury automakers operate.

For thirty years, foreign luxury brands’ operating logic in China never truly changed: Headquarters defined products and technology, globally unified platforms, while Chinese teams handled marketing, channels, and after-sales. The success premise was Chinese customers believed “foreign brands equal high-end.”

This equation has failed.

One set of figures revealed at Mercedes-Benz's Q1 financial meeting is intuitive. The all-new pure electric GLC got more orders in its first three months in Europe than any electric Mercedes model in history. Meanwhile, its platform-mates EQA and EQB sold just 159 units in China in February. Same generation technology—Europeans rush to order, Chinese consumers aren’t interested. Europeans buy Mercedes-branded EVs, the brand itself is the reason; but in China’s over-300,000 RMB market, brand history is no longer a sufficient condition.

The 300,000–400,000 RMB gasoline car segment is BBA’s traditional core price range. This market’s volume in 2025 dropped 15%–19%. Harmony Intelligent Mobility (Hongmeng Zhixing) leads the high-end domestic segment with almost 600,000 deliveries and an average transaction price near 400,000 RMB.

It’s not about losing on price; it’s that consumers’ definition of “luxury” has changed.

The collapse of terminal pricing is the most direct result. The Mercedes-Benz C-Class terminal price fell to around 220,000 RMB; Porsche Macan dropped below 400,000 RMB. These prices are now in the same range as some domestic flagship brands. Reflected in financial reports: Mercedes-Benz’s auto business Q1 2026 sales return rate fell from 7.3% to 3.5%; management expects the 2026 full year to be even lower, 3%–5%. Porsche’s profit margin for 2025 dropped from 14.1% to 1.1%.

China is the market where all these brands are losing speed. The old tactics of foreign luxury brands no longer work in China, but the new tactics aren’t established yet.

Rebuilding the System in China

The three new heads of BBA’s China region share a feature: None grew up in the Chinese market. Jochen Goller comes from Europe, Christoph Liedtke from German HQ, Daniel Weissland transferred from the US. Their predecessors typically had over ten years’ career in China.

They’re not replacing with people who know China better, but ones who know headquarters better. This indicates HQ is pushing not for local tweaks, but a system-level transformation requiring global unified deployment.

The first change to land is in product lines. Of Mercedes-Benz’s 40 new models in the next three years, seven are China-exclusive. Intelligent driving is bound to Momenta for urban navigation, and cabins integrate ByteDance’s “Doubao” large AI model. Audi is binding Huawei’s QianKun intelligent driving, co-developing the ADP smart digital platform with SAIC. BMW’s new generation models are produced in Shenyang; the cabin integrates Alibaba’s Tongyi large model. The essence of these partnerships: Products sold in China—the core competitive advantages of intelligent driving and cabin—are defined by China’s supply chain. In Europe and the US, these brands don’t need to do this.

For the first time in thirty years, foreign luxury brands aren’t just bringing global products to sell in China, but are redefining products in China.

The pricing system is also being reset. BMW will comprehensively cut the official guide price for 31 models by up to 300,000 RMB from New Year’s Day 2026. Mercedes-Benz cut the guide price for C-Class, GLB, and GLC main models by 30,000–70,000 RMB in February. This is not just a terminal promotion, but the manufacturer is actively resetting the price anchor.

The moves in distribution channels are worth a closer look.

According to channel insiders cited by Wall Street Insights, BMW has streamlined its dealer network over the past year and a half—closed some sites, opened new ones in different locations, and improved dealers’ capabilities through training. Guide prices were lowered at the product end, but the result was good: Q1 2026 terminal transaction prices actually rose slightly.

This means BMW is stepping out of the old “inventory push” cycle, and single-car profitability for dealers is improving.

Luxury brands like Lincoln have similarly focused on dealers over the past two-plus years. Wall Street Insights reports Lincoln’s “Spark Spreading Plan” reduced single-store investments from 30 million to about 4 million RMB, cutting dealer operating costs about 40%. This made Lincoln dealers the second most profitable among luxury brands—or first, if subsidies aren’t considered.

For luxury brands, channel efficiency matters more than channel scale. During market contraction, the key to survival isn’t selling more, but having sufficiently light cost structure.

But not all brands have reached this stage. Latest data from the China Automobile Dealers Association (May 12, 2026), shows April’s inventory coefficient for high-end luxury and imported brands remains as high as 1.99—up 34% year-on-year, nearing the two-month warning level.

Channel insiders told Wall Street Insights that after two years’ adjustment, most luxury automakers have completed dealer network slimming. This year, focus is switching from “cutting sites” to “raising quality.” Recently, multiple luxury automakers have eased channel pressure by lowering dealer sales targets—no longer pushing inventory, but letting dealers stabilize operations.

Data provided by CAIDA expert Li Yanwei shows BBA’s three luxury brands cut dealer targets by more than 20% at the end of April.

Product redefinition, price anchor reset, channel moves from inventory push to symbiosis. All three trends point toward the same direction: No longer bringing global cars to China, but building an independent operational system in China.

Fighting for a Comeback

Duan Jianjun took charge of Volvo China on May 11. He’s not inheriting a position for calm strategizing; April inventory ranking was top ten in the industry, channel pressure remains high. Volvo Greater China Sales president Yu Kexin previously told Wall Street Insights about market pressure: “Since Q1, the entire passenger car market has been sliding. By April, there’s been no obvious improvement.”

Volvo is giving Duan Jianjun authority over the whole value chain, covering R&D, manufacturing, supply, sales—directly entering group global core management.

How to manage China—foreign luxury brands are taking different paths.

BBA’s new leaders come from HQ or overseas. The logic is clear: To launch China-exclusive models, bind Chinese tech companies, and reset the pricing system, every step needs HQ resources and authorization. Sending someone who understands HQ decision chains is more effective than sending someone who knows China but can’t influence HQ.

But however the path, the shared challenge is time.

Mercedes-Benz’s China-exclusive models, BMW’s new-generation mass production, Audi’s ADP platform—all are set for concentrated deliveries from the second half of 2026 into 2027. Mertel’s comments on IX3 production were clear: “Orders are many, waiting time still a bit long, but we are increasing shifts.” BMW i3 Munich production line launches in August.

The issue is China’s market rhythm won’t wait. In 2025, China’s NEV penetration rate already exceeds 50%, and domestic brands’ sales above 300,000 RMB grew over 200% year-on-year. The window is shrinking.

Thirty years ago, foreign luxury brands brought brand, technology, and management systems to China, while China provided market and consumers. Thirty years later, the relationship is reversed: China is providing technology and supply chain capability, and foreign brands need to integrate these abilities into their own systems.

Flipping the old model is easy; the hard part is rewriting the new model on the same page. The brand is global, but product definition, technology source, and channel logic all have to become Chinese. How fast and how thoroughly this change happens will determine foreign luxury brands’ position in China for the next decade.

The leadership change is complete; system reconstruction has just begun.

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