BMW Sales Plummet in China, Losing Title as World's Largest Single Market for First Time

In the first half of 2026, BMW Group delivered a total of 1.1567 million vehicles globally, down 4.2% year-over-year. Deliveries in China totaled 261,800 units, a 20.4% decline compared to the same period last year, with the second-quarter drop alone widening to 30.2%. Meanwhile, both European and U.S. markets posted single-digit growth, with Europe surpassing China to become BMW’s largest sales region globally—a first since 2013. China’s share of BMW’s global deliveries has fallen from a peak of 33.5% to approximately 25.5%. During the same period, Mercedes-Benz delivered 210,200 vehicles in China, down 28% year-over-year, while Audi delivered around 218,300 units, a decline of roughly 19%. According to data from the China Passenger Car Association (CPCA), the retail penetration rate of new energy passenger vehicles in China exceeded 60% for three consecutive months starting in April 2026. In June, retail sales of conventional internal combustion engine (ICE) passenger cars stood at 600,000 units, down 39% year-over-year. Core models from traditional premium brands have been significantly impacted. In the first half of 2026, BMW 5 Series sales in China totaled 48,000 units, down 19.1% year-over-year; Audi A6L sales reached 59,300 units, down 29.7%; and Mercedes-Benz E-Class sold 61,200 units. These mid-to-large luxury sedans—once consistently selling over 10,000 units per month—are now struggling to maintain average monthly sales above that threshold. Notably, all top ten best-selling domestically produced premium sedans during this period were new energy vehicles (NEVs). Consumer perceptions of “premium” are shifting—from an emphasis on brand heritage, mechanical quality, and ride comfort toward newer value drivers such as urban advanced driver-assistance systems (ADAS), intelligent cockpits, and high-voltage fast-charging platforms. In Q1 2026, the overall NEV penetration rate in China reached 54.1%, while BMW’s NEV penetration rate in China remained low at just 6.2%. Pricing pressure has also intensified. Data shows that BMW’s average selling price in China in 2025 was RMB 341,000—lower than Chinese brands like NIO, Aito, and Denza. At the beginning of 2026, BMW implemented official price cuts on more than 30 models. Discounts on the ICE-powered X1 reached RMB 70,000, the all-electric i3 saw discounts of nearly RMB 160,000, and the flagship i7 was reduced by approximately RMB 300,000. Due to its market performance, BMW revised its full-year earnings guidance downward for the third consecutive year in June 2026, lowering its expected EBIT margin for its automotive segment from 4–6% to 1–3%. On the distribution front, as of Q1 2026, BMW operated 630 dealer outlets in China, down 33 from the prior-year period. The company has proactively reduced its wholesale volume targets in China and lowered inventory assessment coefficients for dealers, with some dealers seeing their annual sales targets cut by 20–24%. Strategically, BMW is placing major bets on its “Neue Klasse” (New Class) platform. The first locally produced long-wheelbase iX3 based on this platform is scheduled to open pre-orders at the Chengdu Auto Show in August 2026. It will feature an 800V high-voltage architecture across all domains and BMW’s sixth-generation eDrive electric powertrain. BMW reports that global orders for this model are approaching 100,000 units. Starting July 2026, BMW ceased production of older-platform-based locally made EVs—including the i3, i5, and iX1—whose range, charging speed, and smart features lag behind those of Chinese competitors. BMW plans to launch more than 40 new or updated models by 2027.