German luxury cars in China are seeing a big decline in their sale prices after the country’s stock market sell-off but also because of a slow and worrisome economy over there.

Following a decline in customer traffic and order, twelve BMW stores that are run by a dealer group with showrooms across China found themselves in a position to offer major discounts in order to attract new registrations. The head of the chain said that business had not been doing well because of China’s slowing economic growth and attempts against corruption over the sales of showy cars, forcing him and his stores to give a 5% discount on its cars to improve sales last year.

“The business has been slow for the last 18 months, but lately we have had to discount even more. When people walk into a showroom now, with anything less than 15% discount they would not even consider opening their wallets,” said a dealer operator who preferred to remain anonymous.

Over the last two weeks, a stock market rout hit the net worth of potential buyers, which led to many of these stores to offer even bigger discounts on cars like the BMW X6 crossover SUV. BMW has released a statement explaining that they understood the necessity in offering support to dealers who are affected by a volatile market, implementing a series of measures like reducing shipments to decrease inventory and other means to manage their cash flows. Discounts are not only being applied among premium car brands, but they seem to have taken over the entire passenger car market in China. Prices paid by customers have continued to decrease since 2012 to around 170,000 yuan due to heavy discounts given by dealers.

By Gabriela Florea


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