(C) PCAuto

BEIJING – The once-dominant reign of global premium automakers in China is facing a structural crisis. As domestic manufacturers rapidly enhance their technological prowess, the Chinese luxury vehicle market—long considered a "golden goose" for foreign brands—is turning into a graveyard for traditional giants like BMW, Mercedes-Benz, and Audi.

Double-Digit Declines for German Titans
According to the China Passenger Car Association (CPCA), the sales of the German "Big Three" have cratered this year. Between January and November 2024, BMW sold 528,000 units, a 14.7% year-on-year drop. Mercedes-Benz and Audi each recorded sales of 518,000 units, plunging 18.7% and 13.3% respectively.

This is not a temporary dip but a long-term erosion of market share. Consulting firm Ernst & Young (EY) reported that the market share of German brands in China fell to 28.9% in the third quarter of 2024, a staggering drop from nearly 40% just five years ago. Porsche has already reacted to this cooling demand by slashing its dealership network from 144 locations to just 80.

The Rise of "Made-in-China" Luxury
Industry analysts point to a shift in consumer behavior among China’s wealthy elite. Amid a prolonged economic slowdown, these buyers are increasingly opting for homegrown tech-heavy brands over European prestige.

The primary disruptor is Huawei. Its ultra-luxury electric sedan, the Maestro (Juijie) S800, priced above $100,000, surpassed 10,000 deliveries in just 202 days. It has overtaken the Porsche Panamera and Mercedes S-Class to become the top-selling vehicle in its price segment. Similarly, BYD’s luxury sub-brand Denza—once a joint venture with Daimler—sold over 13,000 units in November alone.

Hyper-Localization and the Squeeze on Hyundai
The overall market is rapidly localizing. Chinese domestic brands now command 64% of the total market, up from the 40% range seen in the 2010s. This leaves global firms fighting over a shrinking 36% slice of the pie.

South Korean automakers are also feeling the heat. Hyundai Motor recently launched the Elecxio, its first dedicated EV developed specifically for the Chinese market. Despite a competitive price tag of approximately $17,000, it sold a meager 221 units in November. Consequently, Hyundai is shifting its strategy, transforming its Beijing-Hyundai plants into export hubs to utilize China as a base for global distribution rather than a primary consumer market.