Premium Brands in Crisis: Caught Between BBA Price Cuts and New EV Rivals

Facing dual pressures from steep price cuts by BBA brands—such as the Mercedes-Benz GLB dropping to as low as RMB 144,900 and the Audi A6L offering discounts nearing RMB 150,000—and the rapid rise of Chinese new-energy vehicle (NEV) brands, second-tier luxury automakers like Volvo, Lexus, and Cadillac are encountering severe challenges. Their traditional strategy of offering high specifications at relatively low prices has lost effectiveness, leaving them trapped in a dilemma: failing to sell without price cuts, yet damaging brand equity when they do discount. In a market where NEVs already account for over 50% of new car sales, most second-tier luxury brands still rely heavily on internal combustion engine or mild-hybrid models and have been slow to transition. To survive, these brands are rolling out various strategies: Volvo is betting big on hybrids, Lexus is moving toward local production in China, Jaguar Land Rover is leveraging Chery’s EV platform, and Cadillac is accelerating its electrification efforts. Industry experts argue that merely cutting prices or hastily launching electric vehicles won’t be sustainable. Only by comprehensively restructuring their product portfolios and organizational systems—and deeply integrating into China’s electric and intelligent automotive ecosystem—can these brands hope to survive the ongoing industry shakeout.