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Author | Wang Xiaojuan

Editor | Zhou Zhiyu

The BMW priced at RMB 170,000 had not been sold for a month when BMW withdrew its price reduction promotion and withdrew from the price war. The price of the BMW i3 returned to over RMB 200,000.

However, BMW seemed to be at a loss as it had to cut prices drastically and then raise them again in such a short period of time, and the dealers' actions were also somewhat distorted.

Recently, many consumers told Wall Street Journal that they ordered BMW i3 in June or early July, but when the agreed delivery time came, they were unable to pick up the car as the 4S store refused to deliver it.

In response to the above-mentioned refusal to deliver, BMW responded to Wall Street Journal on July 22 that the cases involved were all individual cases and that it was communicating with the relevant dealers, urging them to comply with the "Automobile Sales Management Measures" and relevant laws, regulations and contractual agreements, safeguard consumer rights and interests, and ensure that consumers receive a satisfactory service experience.

For car companies such as BMW, it is not easy to voluntarily withdraw from the price war. They will face the problem of rebalancing interests with dealers and consumers.

When BMW withdrew from the price war, it specifically mentioned that it would work with dealers to overcome difficulties. Dai Hexuan, CEO of BMW Brilliance, said that BMW would discuss sustainable business models with its partners to ensure that all parties can make enough money to survive into the future.

Now it is facing criticism from consumers because dealers refuse to deliver cars.

Regarding the situation where they cannot pick up their cars, many prospective car owners gave different feedback.

A prospective car owner in Chongqing said, "I am the victim of having to pay an extra 30,000 yuan to pick up the car." She bought a BMW i3 for 174,000 yuan, but when it was time to pick up the car, the salesperson suddenly said that she had to pay an extra 30,000 yuan. After returning the deposit, the owner turned around and bought a Tesla.

A prospective car owner in Zhengzhou, Henan, also ordered a BMW i3. The price agreed upon at the end of June was 200,000 yuan for full payment and 180,000 yuan for loan. In late July, the salesperson said that if he bought the car with a loan, he could pick it up as scheduled, but if he bought it in full, he would not be able to pick it up for the time being, or he could choose a more expensive model that would be available.

More prospective car owners are faced with situations where 4S stores directly say they don’t have the car. The best case scenario is that the deposit can be refunded, but it takes a long time to process. For these prospective car owners who have ordered cars, “time has been wasted, and the price is not as good as before, which makes me very angry.”

A BMW salesperson said that the 4S store had indeed cleared out its inventory and had no cars in stock. After the BMW i3 reached its base price of 170,000 yuan in early June, it began to rebound, and it was no longer possible to get this price if you ordered a car at the end of June.

By mid-July, when BMW officially announced its withdrawal from the price war, the price of the BMW i3 had risen by more than 50,000 yuan from its lowest point, and the prices of other models had also risen. Several BMW salesmen said that dealers would have fewer cars in the second half of the year than in the first half, and it was expected that the prices of all BMW models would rise further in the future.

Now that BMW dealers are no longer under pressure from sales and inventory, they intend to take back the initiative and extricate themselves from the price war.

Over the past year and a half, dealers have been caught in a price war in the auto market. Many dealers that mainly sell traditional luxury car brands such as BMW, Porsche and Lexus have encountered a situation where "the more they sell, the more they lose money."

Guanghui Auto, which was delisted a few days ago, is one of BMW's dealers. Some of the 4S stores that refused to deliver the cars are under Guanghui Auto. These prospective car owners are not only worried about not being delivered the cars, but also about whether the deposits they have paid will be taken away and whether their subsequent rights and interests can be protected.

According to the latest performance forecast, Guanghui Auto expects a net loss of 583 million yuan to 699 million yuan attributable to shareholders of the listed company in the first half of 2024.

Another representative BMW dealer is the East America Group. Like many other dealers, although its revenue was maintained, its profits plummeted.

According to the 2023 financial report released by East Auto, its revenue was RMB 28.555 billion, a year-on-year decrease of 0.3% from 2022; but its net profit was RMB 156 million, a year-on-year decrease of 72%, and the gross profit margin of new car sales was directly negative, reaching -0.6%.

This also means that when BMW hopes to end the price war and focus on developing quality rather than scale, dealers are eager to get out of the vortex.

Recently, many car companies have withdrawn from price wars or their rights have declined. However, BMW's recent experience shows that simply withdrawing is not the end, but the beginning of new problems. How to balance the interests of all parties is the key to withdrawing safely.

Moreover, different car companies have different situations. Luxury brands such as BMW can return to luxury positioning and sell according to the logic of luxury goods. But for mass brands, they do not have such advantages. After the price is no longer rolled out, it is obvious that a new fulcrum is needed to buy a car. If not, it is necessary to maintain the discount to attract consumers. Recently, relevant personnel of GAC Honda responded to the media that they have not withdrawn from the price war.

What's more, the market now has new players. With BYD, Huawei and other new energy companies stirring up the market, the Chinese auto market, which was once dominated by joint venture brands, especially BBA, and set product prices, has been controlled by these latecomers. The future trend of the market depends more on the next move of BYD, Wenjie and others.

If BMW can maintain its prices stable for a long time after the off-season of July and August, and its sales volume does not drop sharply, it can be said that it has withdrawn from the price war.

Today, BMW still needs to face a series of challenges brought about by price corrections and find reasons for consumers to continue paying for it.