Mercedes, BMW, Audi See Sharp Sales and Profit Declines in China as Demand Shifts
In the first half of 2026, German luxury automakers Mercedes-Benz, BMW, and Audi reported significant declines in sales and profits in China, with double-digit sales drops and some brands seeing second-quarter profits fall by over 30%. Data from the China Association of Automobile Manufacturers shows Chinese brand passenger car market share exceeded 65% in the period, with sales of models priced above RMB 300,000 surpassing 40% for the first time. The companies are adjusting strategies, including increased R&D, local production, and joint development of electric platforms.
In the first half of 2026, German luxury car brands experienced notable declines in sales and profits in the Chinese market. Financial data released by Mercedes-Benz, BMW, and Audi showed that their China sales fell by double-digit percentages year on year, with some brands' second-quarter profits down more than 30% from the same period last year. All three automakers cited intensifying competition in the Chinese market and the accelerating premium push by local brands as key factors.
According to data from the China Association of Automobile Manufacturers, in the first half of 2026, the market share of Chinese-brand passenger cars exceeded 65%, and for the first time, sales of models priced above RMB 300,000 accounted for over 40% of that segment. Several Chinese automakers' new energy flagship models now directly compete with imported luxury models of similar prices in terms of intelligent driving, cabin interaction, and battery range. Transaction prices for some former mainstream luxury models have softened, and dealer inventory pressure has increased.
In response to these market changes, the three automakers have announced adjustment plans. Mercedes-Benz said it will increase R&D investment in China and accelerate the localization of its pure electric models; BMW said it will optimize its dealer network layout and adjust the configuration strategy of some imported models; Audi plans to jointly develop an exclusive electric platform for the Chinese market with its Chinese partner.
Why this event matters
The event has a measured impact on 2 industrys. The strongest current signal is positive for New Energy Vehicles, with intensity 80/100 and 90% confidence over a medium term horizon.
New Energy Vehicles
- Direction
- positive
- Intensity
- 80
- Confidence
- 90%
- Horizon
- Medium term
Conventional Vehicles
- Direction
- negative
- Intensity
- 75
- Confidence
- 85%
- Horizon
- Medium term
Impact figures are analytical estimates that combine direction, intensity, confidence and event importance. They are not investment advice.