Mercedes Cuts Prices by 10%, But Dealers Struggle as Terminal Prices Hold Steady

On February 1, 2026, Mercedes-Benz announced an approximate 10% reduction in the official manufacturer-suggested retail prices (MSRPs) for its core models, including the C-Class, GLC, and GLB. However, multiple dealers revealed that actual transaction prices at the dealership level have not significantly decreased—largely because concurrent reductions in discounts have offset the official price cuts, leaving consumers’ final out-the-door prices largely unchanged. For example, while the MSRP of the C 260 L Sport trim dropped to RMB 324,600, the total cost for buyers financing their purchase remains around RMB 270,000. This price adjustment stems from a rare direct appeal submitted in late 2025 by the China Association of Automobile Dealers (CAAD), representing dealerships under the All-China Federation of Industry and Commerce, to higher authorities. The appeal highlighted severe challenges facing dealers, including excessive inventory, inverted pricing (where wholesale prices exceed retail prices), and delayed manufacturer rebates. Industry analysts note that the official price cut is primarily aimed at alleviating dealers’ cash-flow pressures: by lowering wholesale costs, Mercedes-Benz seeks to correct price inversions and shift a portion of profits—traditionally delivered via post-sale rebates—forward into upfront margins. In 2025, Mercedes-Benz’s sales in China declined by 19.5%, reflecting broader pressures across the premium automotive segment. The traditional business model—characterized by high MSRPs, aggressive inventory loading, and reliance on rebate-driven profits—is becoming unsustainable. Experts argue that automakers and dealers must urgently establish a more equitable and transparent partnership.