Volvo's prices have been halved, why are second-tier luxury brands failing to sell well?

If you have recently had the chance to step into a Volvo 4S dealership, congratulations, you will get an unexpectedly low price.The Volvo S90, the brand's flagship sedan that used to cost over 400,000 RMB in full on-road price, now has a base sticker price of just over 200,000 RMB, and the full on-road payment can even be controlled under 220,000 RMB.

You heard that right. This mid-to-large luxury sedan that is over 5 meters long with a wheelbase of 3061 mm is now sold at the price of a high-trim level joint-venture B-segment sedan, with a price cut of nearly 50%.

The first thought that popped into my mind when I heard the news at first was,Volvo, the byword for "Scandinavian luxury" and "safety", a symbol of understated quality, such a low price should make people rush to buy it.

But what about the actual situation? In July, among more than 200 4S stores across the country, only 388 units were sold in total, with an average of less than 2 units per store per month. In August, the situation was slightly better, with discounts fully ramped up, the monthly retail volume barely rebounded to 1554 units. People used to say that as long as you dare to cut prices, I dare to buy. But now the price has been halved, why is it still not selling well?

In fact, Volvo is not the only brand that is struggling with poor sales. In the first half of 2026, Volvo's sales in China reached 47,635 units, plummeting 23.7% year on year. Cadillac sold 44,557 units, down 10.8%; Lincoln sold 12,409 units, down 20.9%; Lexus sold 71,900 units, down 15.4%.

It can be said that,none of the second-tier luxury brands are spared. The price drops are also shocking. The terminal price of Cadillac CT5 has fallen to 179,900 RMB and above, 110,000 RMB lower than the official guide price. The Land Rover Evoque L is even more outrageous. Back in the day, customers had to pay a premium to pick up the car with an on-road price of nearly 900,000 RMB, but now it only costs 179,800 RMB.

At this point, a big question arises: what on earth has happened to second-tier luxury brands? How come the "dream car" in the eyes of ordinary people in the past can no longer sell well?

The first reason is that successive price cuts by BBA have directly squeezed out the middle price range that the second-tier luxury brands relied on for survival. Why did second-tier luxury brands sell well before? It relied on a differentiation strategy of "being slightly cheaper than BBA". Precisely because BBA's prices were kept high, second-tier brands had enough price difference space to create the concept of "light luxury".

Consumers who cannot afford the Mercedes-Benz E-Class would settle for the Volvo S90 as a second choice; those who think the Mercedes-Benz C-Class is too expensive and not cost-effective would turn to the Cadillac CT5.This logic has held true for more than 20 years.

But in 2026, this logic was broken by BBA itself.BBA collectively dived down, directly pushing the price of entry-level models below 200,000 RMB. The base price of Mercedes-Benz C200L fell below 190,000 RMB, and the BMW 3 Series has a 120,000 RMB discount. Even the base price of the BMW 5 Series under installment payment has dropped to 280,000 RMB, and the Audi A6L is even more aggressive, with its base price directly falling to 260,000 RMB.

If you are a consumer, seeing this situation, what would you choose? You can get a BBA car for less than 190,000 RMB, would you still choose Volvo or Cadillac? The brand power of the latter is one level lower, but the prices are almost the same. Everyone can figure out this account.The old narrative of cost-effective luxury suddenly becomes pale and powerless when facing the discounted BBA models.

The second reason is that the "car logo" of second-tier luxury brands is far less attractive compared with the "experience" offered by domestic new energy vehicles. In the past, people prioritized brands when buying cars, and the status symbol brought by the car logo was the top consideration for most people, which was a matter of face.

But now it is difficult to impress consumers only by the car logo. More and more consumers put intelligence, vehicle usage cost and cockpit experience in the first place. It should be noted that under this brand-new logic of car purchase, even BBA has to lower its stance, let alone the second-tier luxury brands.

When you buy a domestic new energy vehicle, what do you get? Air suspension, urban intelligent driving, smart cockpit, refrigerator, large screen and comfortable seats. What do second-tier luxury brands offer? Only a low-trim fuel car, with the infotainment chip still staying at Qualcomm Snapdragon 8155, which was considered high-end in 2022 but is only at the medium level now.

On one side is an intelligent terminal with "voice control over the whole vehicle and urban autonomous driving", on the other side is an old fuel vehicle platform with "laggy infotainment system and outdated intelligent driving functions". What is this? This is called dimensionality reduction attack. Although brands like Volvo are praised for their safety, environmental friendliness and chassis texture, these advantages are no longer rare today when high-level active safety systems are standard on domestic new energy vehicles.

Therefore, under the pincer attack from BBA and domestic new energy vehicles, second-tier luxury brands have completely lost their foothold. The only thing they can do is to cut prices.But what price cuts can bring is only a temporary rebound in sales, which cannot cure the root cause.

If a car is always on discount, consumers will form a fixed mindset of "70% off for Jaguar, 60% off for Land Rover, 50% off for Volvo". Everyone will refuse to buy it without a discount, and the brand will have no pricing power at all.

And losing pricing power means that,the era belonging to second-tier luxury brands has quietly come to an end.

This article is from the WeChat official account "Shengchan Team", the author is Shengchan Team Leader, and it is published by 36Kr with authorization.