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the price war in the auto market is still going on. bmw, which withdrew from the war two months ago, has sparked heated discussions with the news that it has "returned to the price war". on september 24, beijing business daily reporters learned from several bmw dealers that the manufacturer is still adopting the "reduced quantity to maintain price" policy, reducing the model quota and stabilizing the terminal price. the store has not received any price adjustment notice. since the beginning of this year, various automakers have competed on costs and prices. the fierce price war has caused "heavy damage" to dealers and automakers. therefore, bmw's choice to "withdraw from the war" can ease the pressure on dealers, but the side effects of "maintaining prices" have gradually emerged. in august this year, bmw's sales in china were nearly halved. bmw is in a dilemma between "reduced quantity to maintain price" and "reduced price to maintain quantity".

dealers continue to maintain prices

"the store has not reduced prices on a large scale. the current installment discount for the 525 model is still around 120,000 yuan." in a bmw 4s store, salesperson li xin (pseudonym) is negotiating car prices with consumers. although li xin repeatedly told consumers that "prices have bottomed out," the customers still wanted to wait. in response, li xin said that since the news that bmw had returned to the price war started online, many consumers have asked whether prices can be reduced further, but the current model discounts have indeed not returned to the price "low point" in june this year.

the reason behind the frequent price inquiry calls from consumers to bmw dealers is a recent report. the report said that the prices of many popular bmw models have been reduced, including the bmw i7, which has been reduced by more than 500,000 yuan. immediately, the topic of "bmw returns to the price war" became a hot search. "the recent fluctuations in terminal discounts are not large, and the increase or decrease of some discounts is also dynamically adjusted by the store based on the sales of the models." a salesperson at a bmw 4s store said that the i7 price reduction was large, mainly because some dealers were clearing out their inventory, but the inventory was basically 1-2 vehicles, which was not of reference value.

beijing business daily reporter learned that the current discount range for new cars in bmw stores is about 50,000 to 120,000 yuan, which is basically the same as in august this year. a bmw dealer manager said that the discounts were indeed large in the first half of this year, and then "reduced quantity to maintain price" began in july. the discounts for models in september have increased compared to july, but the fluctuation is only a few thousand yuan.

the bmw dealer manager cited an example, saying that in june this year, the bmw 525 model had an installment discount of about 140,000 yuan, which shrank to about 115,000 yuan in july, and is currently around 120,000 yuan. for the popular bmw x5 3.0t model, if consumers pay in full for the car, there is no discount, but the installment discount is around 50,000 yuan, and in june it can be 60,000-70,000 yuan.

"the bmw i3, which was previously discounted to 180,000 yuan, is now priced at around 200,000 yuan." the person in charge of the above-mentioned bmw dealer revealed that the discounts on each model are fine-tuned each month based on the sales of new cars in the store, and the current discount range is within the normal range.

according to an insider of bmw china, competition in the chinese auto market has intensified this year, and almost all brands are facing the same challenge. however, bmw has not made any adjustments to its suggested retail prices recently. authorized dealers decide the retail prices independently according to market conditions, and the final transaction price is affected by the specific transaction situation.

single store new car quota reduced by 1/3

in the first half of this year, the price war in the auto market heated up. bmw, as a leading luxury automaker, also "joined the war", and the terminal price dropped significantly. take the bmw i3 as an example. at that time, the discount was almost half off, and the bare car price dropped to about 180,000 yuan. at the same time, the discounts on popular fuel models such as the 3 series, 5 series, and x5 were at a high level. in early july this year, bmw 4s stores began to receive notices from manufacturers to "reduce quantity and maintain price", and then the terminal discounts began to shrink. a bmw dealer manager said that the discounts for new cars are adjusted every week, and the discounts did not stabilize until the end of july to the beginning of august this year. at that time, bmw china insiders said that the second half of this year will "focus on quality" and support dealers to take steady steps.

it is understood that bmw has eased the pressure on dealers by reducing sales tasks. beijing business daily reporters learned that in the past two months, bmw china has been providing subsidies to dealers and reducing car quotas to facilitate dealers to digest inventory. "in the first half of this year, the monthly sales task of the store was about 200 vehicles, and the current sales task has been reduced to 130 vehicles." the person in charge of the above-mentioned bmw dealer revealed that the store had a maximum monthly loss of 3 million yuan in the first half of this year, but with the manufacturer's adjustment of the store's task volume, the store's profit and loss situation has gradually balanced.

according to information disclosed by shanghai jielanlu information technology co., ltd., in september this year, bmw issued the "2024 bmw china and bmw brilliance mid-autumn festival and national day special discount policy" document to all dealers. the policy first affirmed that "the profitability of dealer partners has improved" after the announcement of the withdrawal from the price war in july and august this year. at the same time, in order to further "solve the cash flow and profitability problems of dealers", a special discount of 10,000 yuan per vehicle for the mid-autumn festival and national day was given to all models. in the eyes of the outside world, this also reflects that bmw continues to introduce business support policies for dealers.

"the level of new car discounts depends on the market supply and demand on the one hand, and the manufacturer's sales task volume on the other. starting from july this year, the manufacturer's quota for stores has been reduced by nearly 30%, and the inventory digestion volume has reached 50% in the past two months." a salesperson at a bmw 4s store told the beijing business daily reporter that taking the bmw 5 series as an example, the manufacturer's monthly quota for the store in the first half of this year was around 20 vehicles, and the current quota has been reduced to 12-13 vehicles.

yan jinghui, a member of the expert committee of the china automobile dealers association, believes that dealers and manufacturers are interdependent. if dealers are impacted by excessive market competition, it will eventually backfire on the automakers themselves. many automakers have been "forced" to go out of business in the price war, but in the end, automakers will settle their economic accounts based on their own circumstances. helping dealers relieve pressure is also a way to ensure the sustainability of the brand.

"mistakenly injured" sales in china

the decline in sales caused by the "reduced volume to maintain price" policy also caused bmw to enter a short period of pain.

data shows that in the first half of this year, bmw's global sales volume was 1.0965 million vehicles, a year-on-year increase of 2.3%. however, in the chinese market, sales volume fell by 4.2% year-on-year. at the same time, the financial report shows that the net profit of the bmw group in the first half of this year was 6.62 billion euros, a year-on-year decline of 50%. in the eyes of the outside world, helping dealers reduce pressure is one aspect, and bmw is also trying to protect profits on the other hand.

in fact, after bmw adjusted its sales and business policy in july this year, its sales began to decline in august. data shows that in august this year, bmw's sales in china were 34,800 vehicles, a year-on-year decline of more than 40%. at the same time, bmw was also overtaken by its competitors. data shows that in august this year, mercedes-benz sold 49,000 vehicles in china and audi sold 47,900 vehicles in china.

according to auto analyst zhong shi, the reduction of bmw's terminal discounts is partly due to its own adjustments, and partly to sending a truce signal to competitors. if competitors follow suit, it will have a certain positive effect on stabilizing car market prices. however, the market price war has not stopped. under the current market competition, bmw's terminal adjustments have diverted sales to competitors.

at present, the domestic brands that continue to "attack" have broken the domestic luxury car market dominated by bba (mercedes-benz, bmw, and audi). according to statistics, the sales share of domestic brands in luxury cars has increased from 1.38% in january 2021 to 17.33% in december last year. in addition to bba, new brands such as ideal, wenjie, and zeekr continue to seize the luxury car market share.

a bmw dealer manager told beijing business daily that bmw is currently facing competition not only from traditional luxury brands, but also from new car manufacturers, who are good at marketing and can attract consumers with intelligence and technology. "the largest reduction in bmw sales is in new energy vehicles, including i3 and i5 models, which are out of stock in stores. new energy vehicles were previously sold at a loss."

"under the price war in the auto market, the pressure on automakers and dealers continues to increase. bmw protects dealer interests by reducing sales and adjusting discounts." this is what industry insiders think, but with the decline in sales, how to deal with the decline in market share has become a new issue that bmw needs to consider.

beijing business daily reporter liu xiaomeng