Recently, a news in the automotive industry has attracted widespread attention: BMW China may withdraw from the price war. In the face of this rumor, BMW China gave an official response, saying that it will focus on business quality in the second half of the year and support dealers to make steady progress. This statement seems to confirm the speculation of BMW's strategic adjustment, and also triggers people's in-depth thinking about the market strategy of luxury car brands.
Looking back at BMW's global sales figures for the first half of the year, we can see some interesting trends. In the first half of 2024, the global delivery volume of the BMW brand reached 1,096,500 units, a year-on-year increase of 2.3%. Among them, the sales of pure electric vehicles performed well, reaching 179,600 units, a year-on-year increase of 34.1%. This data shows that BMW's global electrification transition is progressing steadily and is gaining market recognition.
When we focused on the Chinese market, the picture was not as good as it could have been. In the first half of the year, BMW's sales in China (including BMW and MINI brands) were 376,000 units, down 4.2% year-on-year. This figure reflects that BMW's price reduction strategy has not been effective in stimulating sales growth. This situation makes people wonder: is the price war really a good solution to the problem in the Chinese market?
Price wars not only bring potential damage to brand image, but can also have a serious impact on dealer networks. It is reported that due to the serious loss of stores due to the price war, BMW will start to implement the strategy of "reducing volume and guaranteeing prices" from July to ease the operating pressure of dealers. This move reflects BMW's efforts to strike a balance between sales, profitability and brand value.
As early as the end of May this year, BMW has issued a notice to dealers, announcing a series of subsidy reduction and exemption policies. These policies cover a wide range of areas, including new car sales, customer service, financial business, dealer development, and used car business, and are designed to help dealers weather the storm. This move shows that BMW is aware of the severity of the market environment, especially the huge competitive pressure from domestic brands.
In the face of such a complex market environment, BMW has chosen to shift its focus to "business quality", which is a decision worthy of in-depth discussion. In China's increasingly competitive luxury car market, it is difficult to achieve a lasting competitive advantage by relying solely on price wars. Conversely, focusing on business quality may be a more sustainable strategy. This not only includes the improvement of product quality, but also involves the overall improvement of sales service, customer experience and other aspects.
Whether this strategic realignment will work will still need to be tested by time. BMW's challenge is not only to compete with traditional luxury car brands, but also to deal with the rapid rise of domestic new energy vehicle companies. These companies not only excel in technological innovation, but also show strong strength in marketing and brand building.
Against this backdrop, traditional luxury car brands such as BMW need to rethink their positioning and strategies in the Chinese market. On the one hand, they need to maintain the high-end image of the brand and the quality of the product; On the other hand, it has to adapt to the rapidly changing needs and preferences of Chinese consumers. This balance is undoubtedly a huge challenge.
BMW has already made good progress in the transition to electrification. The significant increase in electric vehicle sales worldwide is a positive sign. However, in the Chinese market, BMW still needs to step up its efforts to launch more electric models that meet the needs of local consumers, and continue to innovate in terms of intelligence and connectivity.
Looking ahead, BMW's performance in the Chinese market will be a bellwether for the entire luxury car industry. If the "focus on quality" strategy can be successful, it could trigger a ripple effect across the industry, prompting more brands to rethink their go-to-market strategies.
We also need to pay attention to how BMW balances its global strategy with local needs. The importance of China as the world's largest automotive market is self-evident. BMW needs to be more agile in responding to the specificities of the Chinese market while maintaining global consistency.
BMW's choice to withdraw from the price war and focus instead on the quality of its business reflects that the luxury car market is entering a new phase of competition. At this stage, price competition alone will give way to a more comprehensive quality competition. This is undoubtedly good news for consumers, as it means that they are likely to get higher quality products and services.
This also puts forward higher requirements for automobile companies. They should not only strive for excellence in product research and development, production and manufacturing, but also make comprehensive efforts in sales network, after-sales service, brand building and other aspects. Only in this way can we stand out in the increasingly fierce market competition.
BMW's strategic adjustment also provides us with a window to observe the future direction of the luxury car market. For a long time to come, the balance between price and quality, globalization and localization, tradition and innovation will be the key factors that will determine the success or failure of luxury car brands. Will BMW be able to win this war without gunpowder?