Mercedes, BMW, Audi Slash Prices Amid Slumping Sales as Luxury Car Price War Intensifies

On July 26, 2025, China's luxury car market showed a clear downward pricing trend, with significant price cuts on key models from Mercedes-Benz, BMW, and Audi. The all-in price of the Mercedes-Benz C260L dropped from around RMB 330,000 last year to RMB 250,000; the BMW 5 Series saw its official recommended price slashed by RMB 80,000, while the all-in price of the 3 Series also declined accordingly. The Audi A6L’s base price fell below RMB 260,000, and the Q5L now starts at approximately RMB 240,000 after subsidies. This round of price reductions is closely linked to the sustained sales declines of these three brands in China. In 2025 and the first half of 2026, Mercedes-Benz, BMW, and Audi reported year-over-year sales drops of 28%, 20.4%, and 19%, respectively. The overall market share of luxury vehicles has notably contracted compared to 2023, average transaction prices have fallen, and automakers’ profit margins are under increasing pressure. To respond to these market shifts, all three brands have adopted a “price-for-volume” strategy to clear inventory and are accelerating their transitions toward electrification and intelligent technologies. BMW and Mercedes-Benz have launched new models based on dedicated EV platforms, while Audi has partnered with Huawei to upgrade its intelligent driving systems and has already reshuffled its China management team to adjust its business strategy. This wave of price cuts has also drawn some consumers who originally planned to purchase joint-venture B-segment sedans, highlighting intensifying competition in the luxury car segment.