German car giant BMW returns to the path of price cuts

BMW is cutting its prices again, just two months after a decision to withdraw from the price war.

The German luxury automobile giant is now caught in a dilemma of whether to ensure sales or price levels.

Some BMW dealers have begun to significantly lower the price of a few key models, with even more favorable offers for pure electric models, according to business media Lanjinger.com.

The starting price of a BMW iX1 has been reduced to 188,800 yuan (US$26,533) from the original 299,900 yuan, and the BMW i3, originally 353,900 yuan, was reduced to 208,800 yuan in some stores.

A BMW 4S store salesman in Beijing was quoted as saying that the current discounts are bigger than last month, one reason being sales pressure. "We are clearing inventory of the i3 and 3 series and other old models. With new models coming out next month, their prices couldn't be this low," he said.

Since BMW first announced its big price cuts in June, it has been on a roller coaster of price adjustments.

The company announced its exit from the price war in July, followed by a sharp sales drop in the Chinese market in August.

It then began cutting prices again in September, expecting a sales boost.

Official data show that from January to June this year, BMW's cumulative sales in the global market totaled 1,096,000 units, an increase of 2.3 percent year on year, but the Chinese market fell by 4.2 percent year on year to 375,900 units.

August sales were even more disappointing.

BMW sold 34,800 units in China, down 42 percent year on year from 60,000 units in the same month last year. Compared with 48,900 units in July this year, the year-on-year decline was 28.8 percent.

In September, BMW officially announced a downward revision of its earnings guidance for fiscal year 2024, saying it expects its EBITDA margin (earnings before interest, taxes, depreciation, and amortization) in 2024 to remain between 6 and 7 percent due to technical issues that have led to the shutdown of some cars and continued weak demand in key Asian markets.

The previously announced range expected by BMW was 8 to 10 percent.

Zhang Xiang, secretary general of the International Intelligent Transportation Science and Technology Association, said: "In the short term, BMW can improve sales and share through price reduction strategies, but in the long term it must strengthen the research and development and promotion of new energy models, to adapt to the trend of declining sales of fuel vehicles, and to maintain its competitive advantage in the market."