--- title: "Luxury Automakers Secretly Change Leadership: The Playbook of the Past Three Decades Is Over" type: "News" locale: "en" url: "https://longbridge.com/en/news/286265729.md" description: "Luxury automakers have undergone significant management changes in China, with brands such as Mercedes-Benz, BMW, and Audi replacing their China heads within a short period. Mercedes-Benz China's Q1 sales fell 27% year-on-year, while BMW's dropped 10%, highlighting sales pressure in the Chinese market. The challenge for the new management is to revitalize sales in China. The operational model of the past thirty years is no longer applicable, and luxury brands need to adjust their strategies to cope with competition" datetime: "2026-05-13T12:56:46.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286265729.md) - [en](https://longbridge.com/en/news/286265729.md) - [zh-HK](https://longbridge.com/zh-HK/news/286265729.md) --- # Luxury Automakers Secretly Change Leadership: The Playbook of the Past Three Decades Is Over Author | Zhou Zhiyu Three months ago, Duan Jianjun was still at the helm of Mercedes-Benz China, the brand’s first Chinese CEO in the country. On February 14, Mercedes-Benz announced his departure due to personal reasons, with Li Desi from the German headquarters succeeding him. On May 11, Duan Jianjun appeared in Volvo’s appointment announcement as President and CEO of Greater China, effective immediately. Ten years ago, this would have been nearly impossible. At that time, management rotations at foreign luxury brands in China were low-frequency routine shifts, with each adjustment requiring lengthy internal deliberation. However, over the past five months, luxury automakers have completed a near-synchronous organizational restructuring in China. Within less than a month, BMW, Mercedes-Benz, and Audi collectively replaced their China heads, while Tim Howard, CFO of Jaguar Land Rover China, took over as CEO of the region. The recently released first-quarter reports explain the source of this urgency. Mercedes-Benz China’s Q1 sales fell 27% year-on-year, while North America grew by 16%; BMW China dropped 10%, while Europe grew by 3%. With the same product lineup performing well in other global markets, only China is experiencing accelerated deceleration. The first specific question facing the new batch of management is: How to sell cars again in China. ## **The Old Model Has Failed** BMW CFO Walter Mertel stated during the earnings call on May 6: “After equipping with the Neue Klasse platform and Momenta’s intelligent driving solution, ‘we will be on par with competitors in the Chinese market.’” For the financial head of a global luxury brand to publicly admit that its products need to catch up with Chinese competitors reflects a change in how luxury automakers operate. Over the past thirty years, the operational logic of foreign luxury brands in China has never truly changed: Headquarters defined products and technology routes, global unified platforms were used, and China teams were responsible for marketing, channels, and after-sales service. The premise of this model’s success was that Chinese consumers equated “foreign brands” with “high-end.” This equation has failed. A set of data revealed during Mercedes-Benz’s Q1 earnings call was most intuitive: The order volume for the all-new electric GLC in Europe during its first three months exceeded that of any electric vehicle model in Mercedes-Benz’s history. Meanwhile, the EQA and EQB on the same platform sold a combined total of 159 units in China in February. With the same generation of technology, European consumers rushed to place orders, while the Chinese market showed little interest. In Europe, buyers are purchasing Mercedes-Benz branded electric vehicles, where the brand itself is the reason for purchase; but in China’s market segment above RMB 300,000, brand history is no longer a sufficient condition. The RMB 300,000 to 400,000 fuel vehicle segment is the traditional core price band for BBA (BMW, Benz, Audi). Sales in this segment declined by 15% to 19% in 2025. HIMA (Harmony Intelligent Mobility Alliance) occupies the leading position in the independent high-end sector with nearly 600,000 deliveries and an average transaction price close to RMB 400,000. It is not that they lost the price war; rather, consumers’ definition of “luxury” has changed. The collapse of terminal prices is the most direct consequence. The terminal transaction price of the Mercedes-Benz C-Class has fallen to around RMB 220,000, and the Porsche Macan has dropped below RMB 400,000. These prices are now in the same range as flagships from some domestic brands. Reflected in the financial reports, Mercedes-Benz’s automotive business sales return rate in Q1 2026 fell from 7.3% to 3.5%, with management’s full-year guidance for 2026 even lower, at 3% to 5%. Porsche’s full-year profit margin for 2025 also dropped from 14.1% to 1.1%. China is the market where all these brands are losing momentum. The old playbook of foreign luxury brands no longer works in China, but the new playbook has not yet been proven successful. ## **Rebuilding the System in China** The three new heads of BBA in China share a common characteristic: None of them grew up in the Chinese market. Ke Ruichen comes from Europe, Li Desi from the German headquarters, and Daniel Weissland was transferred from the United States. Their predecessors generally had careers in China spanning more than 10 years. Those brought in are not people who understand China better, but those who understand the headquarters better. This itself indicates that what headquarters wants to push is not partial repairs, but system-level changes that require the implementation of a global unified deployment. Changes in the product line are being implemented first. Of the 40 new models Mercedes-Benz will launch in the next three years, seven are exclusive to China; intelligent driving is tied to Momenta for urban navigation, and the cockpit integrates ByteDance’s “Doubao” large language model. Audi is partnered with Huawei for Qiankun intelligent driving and jointly developing the intelligent digital platform ADP with SAIC Motor. BMW’s Neue Klasse models are mass-produced in Shenyang, with the cockpit integrating Alibaba’s Tongyi large language model. The essence of these collaborations is that for products sold in China, the core competencies of intelligent driving and cockpits will be defined by the Chinese supply chain. In European and American markets, these brands do not need to do this at all. For the first time in thirty years, foreign luxury brands are not bringing global products to sell in China, but redefining products in China. The pricing system is also being reset. Starting New Year’s Day 2026, BMW comprehensively lowered the official guide prices for 31 models, with reductions of up to RMB 300,000. In February, Mercedes-Benz officially reduced prices for three main models—the C-Class, GLB, and GLC—by RMB 30,000 to 70,000. This is not terminal promotion, but the manufacturer actively resetting the price anchor. Actions on the channel side are worth examining more closely. Wallstreetcn learned from channel insiders that over the past year and a half, BMW streamlined its dealer network, closing some outlets and opening new ones in different locations, while enhancing the capabilities of remaining dealers through training. Simultaneously, guide prices were adjusted downward on the product side. The final result was positive, with terminal transaction prices slightly increasing in the first quarter of 2026. This means BMW is emerging from the old cycle of “pushing inventory to boost volume,” and the per-unit profitability of dealers is improving. Luxury brands like Lincoln have also been making moves regarding dealers over the past two years. Wallstreetcn understands that Lincoln’s “Spark Plan” reduced single-store investment from RMB 30 million to approximately RMB 4 million, lowering dealer operating costs by about 40%. This has made Lincoln dealers the second most profitable among luxury brands; excluding subsidy factors, they could rank first. For luxury brands, channel efficiency is more important than channel scale. During a market contraction period, the prerequisite for survival is not selling more, but having a sufficiently lean cost structure. However, not all brands have reached this stage. The latest data from the China Automobile Dealers Association on May 12, 2026, showed that the inventory coefficient for high-end luxury and imported brands in April remained as high as 1.99, a year-on-year increase of 34%, approaching the two-month warning line. Wallstreetcn learned from channel insiders that after two years of adjustment, most luxury automakers have basically completed the slimming down of their dealer networks. This year’s focus has shifted from “cutting outlets” to “improving quality.” Recently, several luxury automakers have alleviated channel pressure by lowering dealer sales targets, no longer relying on pushing inventory to boost volume, but allowing dealers to stabilize their operations first. According to data provided by Li Yanwei, an expert at the China Automobile Dealers Association, the three BBA luxury brands lowered dealer targets by more than 20% at the end of April. Redefining products, resetting price anchors, and shifting channels from inventory pushing to symbiosis. These three lines point in the same direction: No longer just selling global cars to China, but establishing a system in China that can operate independently. ## **Fighting a Comeback Battle** Duan Jianjun took charge of Volvo China on May 11. He did not inherit a position for leisurely strategic planning; April’s inventory depth ranked among the top ten in the industry, and channel pressure remains high. Yu Kexin, President of Volvo Car Greater China Sales Company, previously admitted to Wallstreetcn regarding market pressure: “Starting from the first quarter, the entire passenger car market has been declining, and by April, there was no significant improvement.” Volvo has granted Duan Jianjun authority over the industrial and commercial overall operation of the entire value chain, covering R&D, production, supply, and sales, directly entering the group’s global core management layer. Regarding how to manage China, foreign luxury brands have taken their own paths. The replacements at BBA all come from headquarters or overseas. The logic behind this choice is easy to understand: To launch exclusive models in China, partner with Chinese tech companies, and reset the pricing system, every step requires resources and authorization from headquarters. Sending someone who understands the headquarters’ decision-making chain is more efficient than sending someone who understands the Chinese market but cannot drive action at headquarters. But regardless of the path, the common challenge is time. The concentrated delivery window for Mercedes-Benz’s China-exclusive models, BMW’s Neue Klasse mass production, and Audi’s ADP platform is from the second half of 2026 to 2027. Mertel was clear about IX3 capacity during the earnings call: “There are many orders, and the waiting time is still somewhat long, but we are already adding shifts.” BMW i3’s Munich production line will also start in August. The problem is that the pace of the Chinese market will not wait. In 2025, the penetration rate of new energy vehicles in China has already exceeded 50%, and the year-on-year growth rate of sales for domestic brands in the market above RMB 300,000 has exceeded 200%. The window of opportunity is narrowing. Thirty years ago, foreign luxury brands entered China with brands, technology, and management systems, while China provided the market and consumers. Thirty years later, the relationship has reversed. China is beginning to provide technology and supply chain capabilities, and foreign brands need to integrate these capabilities into their own systems. Turning the page on the old playbook is not difficult. The hard part is writing the new playbook on the same sheet of paper. The brand is global, but product definition, technology sources, and channel logic must all become Chinese. How fast and how deep this transition can be achieved will determine the position of foreign luxury brands in China for the next decade. The leadership change is complete; system reconstruction has just begun. Market risks exist; investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. 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