Mercedes Cuts China Sticker Prices to Ease Dealer Losses
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Mercedes-Benz Group AG has slashed suggested retail prices for select models in China by about 10%, bowing to pressure from retailers struggling with widespread losses and mounting inventory in the world’s most competitive auto market.
The adjustment, effective Feb. 1, was confirmed by the auto dealers chamber of the All-China Federation of Industry and Commerce in a Monday statement. The trade body, which had previously sent three letters to the German automaker regarding excessive inventory and delayed rebates, described the move as a pragmatic step to free up liquidity for dealers, though it said the measures still fell short of fully addressing grievances over the company’s overall business policy.
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- Mercedes-Benz cut suggested retail prices in China by about 10% from Feb. 1, 2025, to ease dealership losses caused by excess inventory and liquidity issues.
- Over half (52.6%) of China’s auto dealers operated at a loss in H1 2025; 74.4% faced price inversion with many retail prices more than 15% below procurement costs.
- Dealers criticize long rebate delays and urge further business policy changes; similar issues affect BMW and Audi dealers.
- Mercedes-Benz Group AG
- Mercedes-Benz Group AG has reduced suggested retail prices for certain models in China by around 10% due to retailer pressure. This is a pragmatic step to improve dealer liquidity, though some grievances remain. The move highlights the crisis for luxury automakers in China amid an intense price war. The company has also been criticized for delayed rebate payments, and has signaled further adjustments to its business policies.
- BMW
- BMW, like Mercedes-Benz and Audi, is experiencing significant transaction price discounts of around 30% from the suggested retail price in China, leading to dealers selling cars at a loss without manufacturer rebates. BMW has also made similar price adjustments to address a liquidity crunch and the end of a controversial financing practice in the Chinese market.
- Audi
- Audi is one of the brands whose transaction prices are discounted by about 30% from the suggested retail price in China, alongside Mercedes-Benz and BMW. This situation means dealers often sell these cars at a loss without manufacturer rebates and subsidies, highlighting the severe challenges faced by traditional luxury automakers in the competitive Chinese market.
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