Jakarta –
The Chinese public’s demand for imported luxury cars continues to decline due to the development of the domestic automotive industry, especially electric vehicles (EV). This condition is a nightmare for European luxury car manufacturers such as Porsche, Aston Martin, Mercedes-Benz and BMW
Launching SCMP, Sunday (14/12/2025), the main factor in this decline in demand occurs because the price of electric cars made in China is often much cheaper than imported luxury cars on the market. Not to mention that purchasing a local brand electric car is often accompanied by large discounts and other incentives.
For example, in China buyers of local brand cars can get a trade-in subsidy of up to 20,000 yuan or IDR 47.14 million (exchange rate IDR 2,357/yuan) offered by the government for the purchase of electric and plug-in hybrid vehicles.
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“People tend to buy cheaper entry-level cars where the discounts are more meaningful and the cars are mostly made in China,” said head of China Automotive Industry Research at UBS, Paul Gong.
Apart from that, the prolonged decline in the property market in China has made many local people lose interest in making large purchases. Meanwhile, the affluent or upper middle class are increasingly reluctant to show off their wealth in public, a driving factor in the decline in orders for other imported luxury cars.
Plus China’s economic growth is starting to slow down, the luxury car market segment which usually includes brands such as Mercedes-Benz and BMW is getting smaller.
“Slowing economic growth is one of the main drivers behind weakening demand for premium cars,” explained Claire Yuan, director of corporate ratings for China automotive at S&P Global Ratings.
Yuan explained that the market share of premium car sales in China, which usually cost above 300,000 yuan or Rp. 707 million, will more than double between 2017 and 2023, to around 15% of total car sales in the Bamboo Curtain country.
However, this trend has now reversed. The share of premium car sales will fall to 14% in 2024 and to 13% in the first nine months of 2025.
On the other hand, Chinese manufacturers including BYD have become more aggressive than many Western brands in technological innovation, frequently launching new lower-priced electric and hybrid vehicles, including premium vehicles.
“Chinese automakers’ products are more competitive and more affordable even in the premium segment. That’s why these foreign brands are gradually losing momentum,” Yuan said.
According to the China Association of Automobile Manufacturers, the market share of Chinese brands in passenger car sales increased to nearly 70% in the first 11 months of this year. While German car brands hold a market share of 12%, Japanese brands around 10%, and US brands almost 6%.
“BYD has overtaken Volkswagen as the largest car seller in China in recent years. BYD is by far the best-selling car brand this year in China for new energy vehicles, which include electric and hybrid vehicles,” explained the China Passenger Car Association in its report.
Meanwhile, sales of Mercedes-Benz cars by unit in China fell 27% from the previous year in July-September. Then, sales of BMW and its subsidiary brand, Mini, fell 11.2% year-on-year in the first nine months of 2025.
Porsche and Aston Martin also cited pressure from weaker demand in China. Until the Italian luxury car manufacturer, Ferrari, reported a 13% decline in car shipments compared to the previous year to China, Hong Kong and Taiwan in January-September.
(igo/wedge)
