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our reporter chen yannan reports from beijing

at a time when joint venture auto brands are gradually shrinking, bba (mercedes-benz, bmw, and audi) are making a huge voice.

recently, the bmw group announced that it will launch its first mass-produced hydrogen fuel cell vehicle (fcev) for the market in 2028. on the same day, audi announced that it will build the largest product layout in its brand history for the chinese market, continuing to implement its strategic commitment to china.

at the same time, on september 4, mercedes-benz announced plans to invest more than 14 billion yuan in china with its chinese partners to further enrich its localized product lineup of passenger cars and light commercial vehicles.

in fact, bba is facing a series of challenges. since the first half of the year, bba's deliveries in china have declined to varying degrees. at the same time, its operating performance has also shown a downward trend.

as market competition intensifies, major automakers have entered a period of intensive model launches, and the rise of domestic brands is also squeezing out the market share of luxury brands. as the world's largest single market, the performance of the chinese market is continuing to affect the global market position of luxury automakers. however, bba is currently catching up and has started a new round of reforms, trying to reshape the "moat" of luxury brands.

"the chinese market is one of the largest markets in the world for bba, with huge potential and influence. therefore, bba needs to strengthen its partnership with china, improve localized production and service levels, and strengthen brand building and marketing strategies to return to the 'golden age'." pan jun, director of commodity strategy consulting at a world-renowned consulting firm, said in an interview with a reporter from china business news.

high-end market shrinks

recently, the three major luxury car brands bba successively released their financial reports for the first half of 2024, showing that bba's performance indicators showed a downward trend, among which the decline in profits was the most obvious. as for the reasons for the decline in performance, bba mentioned that china's increasingly fierce market environment had a significant impact on its performance.

financial report data shows that in the first half of 2024, audi achieved an operating profit of approximately 1.982 billion euros, a year-on-year decrease of 42%, the operating profit margin fell to 6.4%, and the operating profit of a single vehicle fell by 36.8% year-on-year; bmw achieved a net profit of 5.656 billion euros, a year-on-year decrease of 14.6%, the operating profit margin fell to 8.65%, and the operating profit of a single vehicle fell by 19.1% year-on-year; mercedes-benz achieved a net profit of approximately 6.087 billion euros, a year-on-year decrease of 20%, and ebit of 7.9 billion euros, a year-on-year decrease of 25%.

mercedes-benz said the decline in performance was due to unfavorable product and market mix, negative impact of net pricing and negative changes in exchange rates. at present, the chinese market has shrunk slightly, and the market conditions in the high-end and luxury car markets remain weak.

bmw and audi have similar views. bmw said that consumer confidence in the chinese market is still low, so it has pushed down sales to a lower-than-expected level. audi said that it is facing challenges in the chinese market, including intensified competition and shrinking high-end car market.

relevant data show that bmw's deliveries in the chinese market were 376,400 vehicles, a year-on-year decrease of 4.3%; mercedes-benz's sales in the first half of the year fell 9% year-on-year to 341,500 vehicles; audi's deliveries in china fell 2.0% year-on-year to 322,000 vehicles.

pan jun told reporters that the reasons for the decline in bba's delivery volume and profits include intensified market competition, consumption upgrading, the impact of new energy vehicles, and brand strategy adjustments.

"objectively speaking, competition in the chinese auto market is becoming increasingly fierce, and the rise of new energy vehicles also poses a challenge to traditional luxury car brands. subjectively, bba may also have certain problems in product innovation, brand building, customer service, etc., leading to its poor performance in the chinese market." zhang yue, chairman of aoyoo international, told reporters.

reshaping the pricing system

under the pressure of competition, many luxury brands have launched a price cut this year. subsequently, the topic of "big price cut" became a hot search. many sales staff told reporters that the price in june has reached the historical "freezing point" and is in a state of losing money on every car sold.

a salesperson of a luxury car brand told the reporter: "when the price war was fierce, we sold a new energy vehicle at a loss of 100,000 yuan. however, even at the 'historical low' price, many consumers who have been paying attention to this car for a long time are still waiting and watching, because they think the price will fall further."

zhan junhao, a well-known strategic positioning expert and founder of fujian huace brand positioning consulting, said in an interview with reporters that from a brand perspective, the advantages of bba lie in their profound brand heritage, exquisite craftsmanship and excellent quality. they represent luxury, high-end and status symbols, and have extensive brand recognition and loyalty. however, their higher prices put them under greater pressure during economic downturns.

therefore, under such circumstances, bba has adopted a promotional price reduction model. however, the practice of exchanging price for volume has also damaged the brand value of high-end brands. based on this, many first-tier high-end car brands including audi, bmw, and mercedes-benz seem to be willing to withdraw from the price war, and some of their models have also increased in price.

sales staff at several luxury brand 4s stores in beijing told reporters that the prices of all products from bmw, mercedes-benz and other brands have been raised, with the increase ranging from several thousand yuan to tens of thousands of yuan.

"luxury brands such as bmw and mercedes-benz pay more attention to their own brand heritage and brand reputation, and do not rely on sales volume to win. therefore, maintaining a niche high-end brand image is the core vitality of a luxury car brand," said zhang hong, member of the expert committee of the china automobile dealers association.

bba each released a "big move"

many industry insiders believe that in order to get out of the price "involution", a differentiated path must be taken. currently, the bmw group is taking a different approach.

on september 3, bmw group and toyota motor corporation signed a memorandum of understanding (mou) on comprehensive cooperation in fuel cell technology. based on the results of the cooperation, bmw will launch fuel cell vehicle products with brand characteristics; in addition, the two parties will also effectively reduce the overall cost of fuel cell technology through cooperation, thereby promoting the popularity of hydrogen fuel cell vehicles in the market.

"the launch of mass-produced fuel cell vehicles is an important milestone for bmw and the automotive industry. bmw has foreseen that market demand for fuel cell vehicles will increase significantly in the future," said zipse, chairman of the bmw group.

bmw is committed to achieving carbon neutrality by 2050, but there is currently no single solution that can meet the diverse travel needs of global customers. bmw therefore believes that different drive technologies will coexist in future sustainable travel scenarios.

therefore, bmw will begin to launch a new "new generation" model in the second half of 2025. mass-produced fuel cell vehicles will serve as a powerful supplement to battery-powered pure electric vehicles (bev) and plug-in hybrid vehicles, further enriching bmw's new energy product portfolio.

it is understood that the bmw group's research on hydrogen energy economy and hydrogen fuel cell vehicles is highly consistent with china's development strategy to promote hydrogen energy economy and innovative technologies. china's "medium- and long-term development plan for hydrogen energy industry (2021-2035)" clearly states that hydrogen energy is an important part of the future national energy system, and the domestic hydrogen energy industry is developing positively. bmw's continued research and development in the field of hydrogen fuel cell vehicles will gradually turn the vision of future hydrogen travel into reality; at the same time, bmw brilliance has also actively explored the application scenarios of hydrogen energy in the logistics field.

in fact, based on the chinese market, the system reform of reshaping products and brands is imminent. however, audi still insists on the development policy of walking on two legs of pure electric and fuel vehicles.

the reporter learned that starting from mid-2025, audi will work with china faw to launch pure electric models based on the ppe platform specifically for the chinese market. the first model will be the audi q6l e-tron.

in terms of fuel vehicles, a new generation of local models based on the ppc (premium platform combustion) luxury fuel vehicle platform will also be unveiled, including the new audi a5 family, which will be jointly produced by faw audi and saic audi and provide different body styles.

luo yinghan, president of audi china, emphasized: "as part of audi's strategic growth plan in china, we will comprehensively upgrade our product lineup and work with strong local partners to promote the development of the same audi brand and bring more high-quality products to chinese users."

bai wenxi, vice chairman of the china enterprise capital alliance, told reporters that bba's strategy for building a moat includes strengthening localized research and development and production, launching more new energy and intelligent vehicle models that meet the needs of chinese consumers, improving the quality of after-sales service, and strengthening brand marketing and customer loyalty management.

mercedes-benz is taking some actions. the reporter learned from mercedes-benz that the strategic layout of the transformation, technological innovation and the latest blockbuster products of mercedes-benz group will continue to be implemented in china at the "china speed". through investment in china, mercedes-benz will further participate in the development of high-end manufacturing, new energy vehicles, intelligent networked vehicles and related industrial chains in beijing, fuzhou and surrounding areas, injecting new impetus into the development of local new quality productivity and industrial clusters.

"the chinese market is one of the important pillars of the mercedes-benz group's global strategy and an important driving force for our electrification transformation and technological innovation," said ola källenius, chairman of the board of management of mercedes-benz group ag.

it is understood that another focus of mercedes-benz's investment this time will be used for the local r&d and production of the new long-wheelbase gle suv model exclusively for china. starting from 2025, mercedes-benz will successively put into production the new pure electric long-wheelbase cla model exclusively for china, the new long-wheelbase gle suv model, and the new luxury pure electric mpv based on the van.ea platform. among them, the new long-wheelbase gle suv model is the first to be developed by a chinese team, which will provide a comfortable experience and advanced intelligent technology exclusive to china.

zhan junhao believes that the frequent actions of the three companies show that the chinese market is crucial to bba. in the context of macroeconomic instability, the resilience of the chinese economy and its huge market potential make it the key to bba's strategic layout.

"bmw's launch of mass-produced hydrogen fuel cell vehicles shows its active exploration in the field of new energy and its attempt to lead the future direction of automobile development. audi's creation of the largest-scale product layout shows its emphasis on the chinese market and its determination to meet the needs of different consumers. mercedes-benz's increased investment in china reflects its long-term optimism about the chinese market and its hope to enhance its competitiveness through a localized product lineup." said zhan junhao.