Author | Wang Xiaojuan
Editor | Zhou Zhiyu
Just a month after the 170,000 BMWs were not sold, BMW withdrew the price promotion, exited the price war, and the BMW i3 returned to over 200,000.
In such a short period of time, BMW's significant price reduction and subsequent price increase made it appear somewhat indecisive, leading to some changes in the actions of dealers.
Recently, several consumers told Wall Street News that they ordered a BMW i3 in June or early July, but when the scheduled delivery time arrived, they were unable to pick up the car as agreed, and the 4S dealership refused to deliver.
In response to the refusal to deliver as mentioned above, BMW stated to Wall Street News on July 22 that the cases involved were individual cases, and they are in communication with the relevant dealers, urging them to comply with the &#34;Automobile Sales Management Measures&#34; and relevant laws and regulations, as well as contract agreements, to safeguard consumer rights and ensure consumers receive satisfactory service experiences.
For companies like BMW, voluntarily withdrawing from a price war is not easy, as they will face the need to rebalance interests with dealers and consumers.
When BMW previously exited the price war, it specifically mentioned the need to weather the storm with dealers. Huachen BMW CEO Dai Hexuan stated that BMW will discuss sustainable business models with partners to ensure that all parties can make enough money and survive into the future.
Now, BMW is facing consumer complaints due to dealers refusing to deliver cars.
For customers unable to pick up their cars, the feedback from several prospective car owners varies.
A prospective car owner in Chongqing said, &#34;I was told I had to pay an additional 30,000 yuan to pick up the car.&#34; The BMW i3 she bought for 174,000 yuan required an additional 30,000 yuan for delivery. After canceling the deposit, the owner turned around and bought a Tesla.
Another prospective car owner in Zhengzhou, Henan, also ordered a BMW i3. The price negotiated at the end of June was 200,000 yuan for full payment and 180,000 yuan for a loan. By late July, the salesperson indicated that if purchased with a loan, the car could be picked up as scheduled, but if paid in full, the car could not be delivered temporarily, or they could choose a more expensive model in stock.
Many other prospective car owners have been told by 4S dealers that there are no cars available, with the best-case scenario being able to refund the deposit, but it takes a long time. For these prospective car owners, &#34;time has been wasted, the price is no longer as favorable as before, and they are very upset.&#34;
Some BMW salespeople have indicated that the 4S dealership has indeed run out of inventory and there are no cars available. After the BMW i3 reached its lowest price of 170,000 yuan in early June, prices started to rise, and by the end of June, the price negotiated earlier could no longer be obtained.
By mid-July, when BMW officially announced its withdrawal from the price war, the price of the BMW i3 had increased by over 50,000 yuan from its lowest point, and prices of other models had also risen. Many BMW salespeople have stated that dealers will have fewer cars available in the second half of the year compared to the first half, and it is expected that prices of all BMW models will further increase.
With BMW dealers no longer under pressure from sales volume and inventory, they intend to regain control and withdraw themselves from the price war
Over the past year and a half, dealers have been deeply involved in a price war in the car market. Many dealers of traditional luxury car brands such as BMW, Porsche, and Lexus have encountered a situation of &#34;selling more and losing more&#34;.
Recently, Guanghui Auto, which staggered out of the market a few days ago, is one of BMW's dealers. Some of the 4S stores that refused to deliver the cars are under Guanghui Auto. These prospective car owners not only worry about not getting their cars delivered, but also worry about whether the deposits they have already paid will be taken away and whether their subsequent rights can be guaranteed.
According to the latest performance forecast, Guanghui Auto expects a net loss of RMB 583 million to 699 million attributable to shareholders of the listed company in the first half of 2024.
Another representative dealer of BMW is Meidong Group. Like many other dealers, although its revenue has been maintained, its profits have plummeted.
According to Meidong Auto's 2023 financial report, its revenue was RMB 28.555 billion, a year-on-year decrease of 0.3% from 2022; but the net profit was RMB 156 million, a 72% year-on-year decrease, and the gross profit margin of new car sales was directly negative, reaching -0.6%.
This also means that when BMW hopes to end the price war and focus on quality development rather than scale priority, dealers are also eager to get out of the whirlpool.
Recently, many car companies have also intensively withdrawn from price wars or reduced their rights and interests. However, BMW's recent experience indicates that simply withdrawing is not the end, but the beginning of new problems. Balancing the interests of all parties is the key to safely withdrawing from it.
Moreover, different car companies have different situations. Luxury brands like BMW can return to their luxury positioning and sell according to the logic of luxury goods. However, for mass-market brands, they do not have this advantage. After not rolling back prices, it is obviously necessary to find new leverage to sell cars. If not, they need to maintain discounts to attract consumers. Recently, a person related to GAC Honda responded to the media that they have not withdrawn from the price war.
Furthermore, now there are new controllers of market discourse. With BYD, Huawei's Aito, and others stirring up the market in the form of new energy, the Chinese car market, which was once dominated by joint venture brands, especially BBA controlling the discourse and setting product prices, is now controlled by these newcomers. The market's future trend depends more on the next moves of BYD, Aito, and others.
After the slow sales season of July and August, if BMW's prices can stabilize in the long term and its sales do not decline significantly, then it can be considered as having successfully withdrawn from the price war.
Today's BMW also needs to face a series of tests brought about by the price adjustment and find reasons for consumers to continue to pay for its products

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