The last generation of "pure-blooded" luxury cars was sold to those who buy for the sake of nostalgia.

In 2025, the luxury cars consumers purchase seem to be the last generation of "pure - blooded" luxury cars.

"I bought a 5 Series for my family. In my 10 - year business of running a dealership, this is the lowest price I've ever seen," Lao Liu, a dealership staffer, told 36Kr. He said that after the new 5 Series was launched last year, it was indeed not selling well. "The online reviews are poor, and the conversion rates reported by the salespeople are also low."

However, as a long - term partner of BMW, Lao Liu fully understands and approves of the quality of this generation of the BMW 5 Series. He believes that although the design of this generation of the BMW 5 Series has changed, it can still be recognized as a BMW. "I don't like the next new generation, and many BMW owners don't either."

However, the core factor that prompted him to place an order was still the price.

"The biggest challenge for me now is cash flow. We're losing money on selling the 5 Series. The dealership is relying on after - sales services and bank rebates to stay in business, and we've even cut the sales commissions in half," Lao Liu said.

"We're selling cars at a loss, and the manufacturer is also taking money out of its own pocket to subsidize us. Only the car buyers are benefiting, getting a relatively pure German car at the lowest price."

"The base price of the 5 Series is just over 260,000 yuan, and with a loan, it only costs about 280,000 yuan to drive it off the lot. A year and a half ago, this car was sold for 430,000 yuan," a BMW salesperson told 36Kr. "Even the entry - level BMW X5 is now sold for only 540,000 yuan. You know, two years ago, many people paid over 700,000 yuan for it."

Prices of the eighth - generation BMW 5 Series (Source: Dongchedi)

"The XC60, which used to sell for 400,000 yuan, now has a minimum on - road price of 230,000 yuan," a Volvo dealership staffer told 36Kr. "The S90 has just been updated, with a national unified starting price of 300,000 yuan, but it will drop to 250,000 yuan in a few months, which is the normal price level for this car."

These luxury cars with prices at rock - bottom levels can still be called "pure - blooded" luxury cars.

The models launched between 2023 and 2024 are the last products developed by automakers in 2020, which was almost the peak year for the sales of luxury brands. Apart from some sporadic cost - cutting measures such as minor equipment reductions, performance and quality are still the top priorities.

The market response also shows consumers' recognition of the quality of luxury brands.

After the price cut of the BMW 5 Series, its sales increased for four consecutive months. In May, 11,000 units were sold, and for the first time after the replacement, its sales exceeded those of its competitor, the Mercedes - Benz E - Class. The Volvo XC60 sold 6,147 units in May, which is a good monthly sales result in the past four - year period.

However, in a market environment with increasing competition, the pursuit of quality by luxury brands is also shrinking.

"The market pressure is too great . For new projects of Mercedes - Benz and BMW, they are squeezing the prices to the lowest level," an industry insider told 36Kr. "If we don't finally cut the prices, they may start using those little - known Chinese local brands. Although all automakers follow a set of standards, can foreign giants and local manufacturers be the same?"

The choice for the next - generation luxury cars: cost reduction

The currently available BMW 5 Series is the eighth - generation model launched in February 2024.

"For this generation of the 5 Series, including the 3 Series and X3, you'll find that the exterior and interior designs are in the same series as the BMW iX launched in 2016," a BMW insider told 36Kr. "So the platform and design of the 5 Series you see are from BMW's plans 10 years ago, and the design and development of this car also started in 2020."

Interior of the eighth - generation BMW 5 Series

In 2020 and 2021, BMW sold 770,000 and 840,000 vehicles in China respectively, setting the best records since it entered the Chinese market in 1994. BMW's annual sales targets within the company have also been rising year by year. It's no exaggeration to say that the BMW 5 Series is a product of BMW's heyday.

"In 2021, cost and price were not the top considerations when choosing suppliers," a BMW insider told 36Kr. "Although the anti - roll bar was removed from the long - wheelbase version of the 5 Series, more luxury interior features were added. The overall cost was not extremely compressed, and it still adhered to BMW's standards and style."

However, after the launch of the BMW 5 Series, the market environment changed drastically. A staffer from Brilliance BMW told 36Kr that when setting the targets, the company still had high expectations for its performance in 2024 and set a higher sales target than in 2023.

"Reality gave us a blow. By the second half of the year, we were almost constantly adjusting our sales strategies. We're losing money on selling cars, so the dealerships are reluctant to take in new cars, but we still have to find a way to meet the annual target," he admitted to 36Kr.

Under such circumstances, the automaker had no choice but to adjust the production plan to avoid a huge inventory. At the same time, it is also helping the dealerships through difficult times with subsidies and incentives.

"But the automaker is also having a hard time. Although we know that the era of easy money is over, we still have to ensure basic profits. This kind of survival by relying on subsidies won't last long."

When luxury brands no longer enjoy the privilege of high premiums, cost reduction becomes a necessary option.

In 2024, BMW invited bids from suppliers for its new - generation models. "BMW called us, several suppliers, to their office. Each of us was put in a small room. After I quoted a price, they immediately took my price to the next room to negotiate.

We had several rounds of negotiations. They just wanted to find the supplier with the lowest price," an industry insider sighed to 36Kr. "Previously, BMW gave us the most generous profit margins among all our clients. Now even BMW is squeezing our prices."

Will other luxury brands have an easier time?

Interior of the Mercedes - Benz all - electric CLA

A Mercedes - Benz insider told 36Kr that for the all - electric CLA, Mercedes - Benz has started working with some suppliers that the CLA and C - Class haven't collaborated with for many years. "The reason is simple: they are cheaper. When we didn't have to worry about money before, we didn't consider the price and only chose to cooperate with the top - notch companies in the industry."

After a 43% decline in net profit in the first quarter of 2025, Mercedes - Benz's sense of crisis has been increasing.

A staffer from Beijing Benz told 36Kr that the brand Xiangjie, a cooperation project between BAIC and Huawei, has now become a benchmark for comparison for Beijing Benz.

"We recognize Mercedes - Benz's standards, but is the cost of adhering to these standards too high? From the Xiangjie project, we've also gained some experience. Why can't Mercedes - Benz learn from this experience and make some changes in terms of cost?"

Against the backdrop of the automakers, joint - venture companies, and dealerships all under pressure, cost reduction is almost an inevitable choice for luxury brands. An industry insider told 36Kr that currently, Mercedes - Benz and BMW are inviting bids for projects from 2028 to 2030.

"I've never seen Mercedes - Benz and BMW so determined to cut costs. If we can't offer satisfactory prices, they may replace foreign suppliers with leading local Chinese enterprises."

The parts quality and standards that luxury brands are proud of may be shaken in this wave of cost reduction.

Luxury cars not only need to cut costs but also understand the Chinese market

The root cause of the pressure on luxury brands is the misalignment between product definition and market demand.

In the past when domestic auto brands were weak, when Chinese consumers wanted to buy cars priced over 300,000 yuan, they almost had to choose joint - venture brands. For cars over 600,000 yuan, the options were even more limited to foreign brands.

However, with the intensifying market competition, more and more brands are entering the luxury car segment. In the process of competition and comparison, the problems with the product definitions of luxury brands have been exposed.

These traditional luxury cars are essentially "luxury cars designed for Europeans." The current product definitions and design developments of these luxury brands still mainly focus on the needs of the European and American markets and then radiate globally.

Whether it's Mercedes - Benz or BMW, noise issues rank high on the list of after - sales complaints in China. However, there have been few improvements in noise reduction over the years.

The eighth - generation BMW 5 Series

A R & D staffer told 36Kr that in Germany, there are roads without speed limits, and the local people generally have high driving skills. "If users drive at 220 km/h for half an hour every day, then performance and safety will be the top rules to follow in development."

Among many chassis parts, noise and performance are two mutually exclusive attributes. To achieve a good NVH level, some performance has to be sacrificed in terms of materials and design.

However, in the Chinese market where the speed limit on urban roads is generally 60 km/h and 120 km/h on highways, most consumers have no need for extreme driving. What supported the sales growth of luxury brands in China in the past may not be brand power and product power, but the potential of the Chinese market and the absence of domestic brands.

The exploration of the domestic market by domestic brands has accelerated the sales dilemma of foreign luxury brands.

In the Chinese market where family consumers account for 78%, multi - functional SUVs with high comfort levels are at the top of the best - selling list. The Li L9, with its extended - range power, large space, and comfort features, has caught Mercedes - Benz and BMW off guard.

"The Europeans once developed extended - range technology, but the bosses thought the cost was too high and the returns were too low, so they gave it up," a Mercedes - Benz insider sighed to 36Kr. "The sales of the Li L9 and the Wenjie M9 have made us constantly study why this technology we abandoned has become so popular among the Chinese."

Li L9

The Chinese people's demand for cars, especially luxury cars, has changed. The new product directions of luxury brands are also changing accordingly. But can this change revive the sales of luxury brands?

Global consistency is one of the core factors for consumers to pay for luxury brands. From the new - car development process, we can see that luxury brands still maintain a product development cycle of 3 - 5 years and pay more attention to global integration in the supply chain.

This results in luxury brands being unable to pursue the ultimate in product power and cost - effectiveness like domestic brands. Therefore, the unique competitiveness of luxury brands actually lies in their mechanical quality and brand culture.

Several luxury brand salespeople told 36Kr that when consumers compare domestic brands with luxury cars, they almost always choose domestic brands. Currently, consumers who are still buying fuel - powered luxury cars can be divided into two categories. One category consists of loyal brand users who own more than one vehicle of the same brand.

The other category is the sentimental customers. "This generation grew up influenced by European and American car brands. They've always been paying attention to luxury cars until the prices dropped to a level they could accept."

If luxury brands don't move towards intelligence and comfort, they will face a continued decline in sales and profits. However, currently, luxury cars that are transforming towards intelligence and the future seem to have hurt the feelings of old customers towards the brand. Luxury cars must find a balance between brand heritage and market demand.

The tide has turned.

The core advantage of domestic brands lies in their accurate understanding of the domestic market. They are announcing the end of the era when European and American brands could make easy money just by relying on their brand image.

If luxury brands want to regain the favor of the Chinese market, they must humble themselves and actively adapt to this ever - changing market.

Among these, the heavy global system will become an obstacle for these giants to turn around. The multiple contradictions of maintaining a global unified image and efficiency while having to compromise in specific markets will become a historical challenge for luxury brands.

In the face of the new - generation models pursuing an ultimate sense of the future, isn't the eighth - generation 5 Series in the BMW showroom today the best representative work before the end of the era of traditional luxury cars?