The iX3 L Gets Attention; BMW and Mercedes Face a Bigger China Question

BMW and Mercedes Have Better Products for China. How Much Volume Can They Rebuild?

Evidence · Sep 03, 2026

Also bears on: Mercedes-Benz · China and Localized Luxury

An August 24 white paper titled “Why China Buys Chinese,” from automodicted, a Germany-based boutique automotive consultancy, synthesizes research from McKinsey, Deloitte, and others to provide insights into why BMW, Mercedes-Benz, and Audi have lost sales and share in China, and says the brands aren’t likely to return to their former volumes.

Drawing on McKinsey’s 2025 China Auto Consumer Insights study, automodicted argues EVs have changed buyer priorities from brand to product: the study found a trusted car brand is the number one factor for internal combustion (ICE) cars, but is fifth for EV buyers behind range and charging, static experience (interior, space), energy and maintenance cost, and dynamic experience (steering, chassis). Among buyers who purchased premium Chinese EVs, better autonomous driving performance (cited by 69%), better smart cockpit performance (62%), and a native EV platform (52%) were the most-cited reasons. “No added value from German branding” was cited by 44% (up five percentage points from the prior year) as a reason for selecting a Chinese brand instead. All this suggests German brands’ heritage isn’t doing enough on its own to gain EV consideration and willingness to pay.

The automodicted paper argues that “guochao”—the “national wave” of preference for Chinese brands and cultural products that has been attributed as a major factor in Chinese consumer preference changes—reduces a social barrier to choosing a Chinese brand, but product competitiveness drives purchasing decisions.

While McKinsey indicated brand was weighted below several product attributes in driving EV purchase decisions, its 2025 study showed incumbent brands still have meaningful brand equity. Incumbent brands led in premium and luxury recognition, holding all luxury positions and 10 of the top 11 positions in the premium brand cluster, though a Chinese brand held the top premium position.

The 2025 McKinsey study also projected that as EV technology matures and narrows differences in areas like range, charging, and batteries, brand importance for EV buyers may resemble that of ICE buyers. The automodicted paper identifies one encouraging, if early and isolated, signal that this may be happening: the 2026 McKinsey Auto Consumer Survey said brand has moved up to number two, behind range and charging, in EV purchase factor importance.

BMW’s and Mercedes’ next-generation EV models leverage updated platforms, incorporate localized technology from respected Chinese technology partners like Momenta, and are priced much more competitively than earlier models. They serve as initial tests of whether more competitive products will better position these brands in China. The Mercedes CLA L is currently on sale, and the electric GLC L is launching in stages; BMW opened iX3 L reservations on August 21.

Chinese shoppers found the Mercedes CLA L less compelling than the alternatives, with too little traditional Mercedes luxury and practicality to compensate. Third-party reports on the BMW iX3 L say it received a significant number of reservations based on pictures, specs, and pricing alone, suggesting it may have found a competitive product-and-price combination. Mercedes is testing whether the market agrees the GLC L, while still priced competitively relative to earlier models, is differentiated and worth a premium.

While BMW and Mercedes are demonstrating adaptation to the Chinese market, automodicted concludes that some former China volume may not be defensible at healthy economics:

R&R’s current Porsche read is that the brand has accepted a smaller China business on its own terms, reasoning that competing on the dynamics outlined above would compromise its brand. BMW and Mercedes operate much larger-volume premium businesses and have much stronger incentives to recover profitable volume.

If BMW and Mercedes can sustainably offer competitive products at prices customers will accept, and if buyers again give brand more weight in their purchasing decisions, the question is then whether they will remain permanently smaller in China's fiercely competitive market or will be able to rebuild volume profitably.

The BMW iX3 L Gets Chinese Buyers’ Attention, but a Long Conversion Window Puts Reservations at Risk

Evidence · Sep 02, 2026

An August 26 third-party report from 36Kr (Google translation to English) says the new iX3 L model that BMW opened reservations for on August 21 has accumulated “tens of thousands” of preliminary reservations in China, an encouraging demand signal, though BMW hasn’t shared a China reservation total and no independent source has confirmed the figure. These “small orders”—low-commitment, preliminary reservations—were made without seeing or driving the car first.

An independent August 23 dealer check performed by Beijing Business Daily found no display or test-drive vehicles at major Beijing BMW stores and reported 50L deliveries beginning in November, with the 40L and 30L following in December. 36Kr says the broader delivery ramp extends into 2027. BMW is mitigating this with a common market tactic, a “waiting points” system; BMW Group PressClub China’s August 21 launch release confirms that customers receive 100 membership points per day from reservation to delivery. 36Kr calculates that a wait into January could produce roughly 16,000 points, worth about 4,000 yuan.

CNMO (Google translation to English) cited an automotive blogger who said BMW dealers had received a strong market response, with order volume exceeding expectations at many stores. They said the mid-range 40L and top-of-the-line 50L had received the most reservations, and that buyers most often compared the iX3 L with the Tesla Model Y. Based on dealer feedback, CNMO attributed the preference for the 40L and 50L to these models’ use of BMW’s large cylindrical ternary-lithium battery cells.

That there’s apparently this much interest in the iX3 L based on pictures and specifications alone bodes well, but the lack of display and test-drive vehicles until late October, initial deliveries not beginning until November, and some preliminary reservations remaining open until January 31 create a long conversion window in China’s fast-moving market. There’s a lot of room for cancellations.

The conversion challenge also tests BMW’s new retail model. BMW's shift to nationwide pricing seems to be changing dealer behavior from competing on price among customers predisposed to a BMW to attempting to persuade buyers not considering it to add the brand to their shortlist. A dealer interviewed said that with price discounting no longer a primary lever, salespeople with the most product knowledge will be the most successful, though several dealers told the publication BMW and other German OEMs need to better equip their dealer networks to communicate technology highlights to China’s spec-savvy buyers. 36Kr also spoke with a dealer who said the dealership earns a small profit on each new iX3 L sale, adding that most of BMW’s current models are still operating at a loss and rely on subsidies and rebates, an encouraging though narrow and anecdotal indicator.

So far, BMW seems to have combined product and pricing in a way that generates consideration. Now its retail system needs to convert preliminary reservations into firm orders and firm orders into deliveries. This is a critical area where management’s announced changes to BMW’s operating model to respond more quickly to market signals will be tested.