Used luxury car prices collapse, has the value preservation myth of "Mercedes-Benzes" been shattered?

The second-hand prices of luxury fuel vehicles are being reassessed by the market.

On July 1, a set of luxury second-hand car prices from the Qingdao Luhai Auto Trading Market drew attention in the automotive circulation sector.

It is understood that some Bentley Flying Spurs with an age of over 8 years have had their second-hand listing prices drop to 268k yuan, while 8 years ago, the manufacturer's suggested retail price for this model was over 2 million yuan. The second-hand price for an entry-level Porsche Macan has fallen to as low as 150k yuan. For the Volkswagen Touareg, whose new car guide price once approached 900k yuan, the actual second-hand transaction price has dropped to 68k yuan.

In addition, multiple mid-to-large luxury SUVs under brands such as Mercedes-Benz and Land Rover have seen their second-hand circulation prices drop significantly recently, with the overall price range now approaching that of ordinary compact family cars.

This is not an isolated phenomenon in the Qingdao market. In mid-June, the Shanghai second-hand car trading market also saw a wave of price cuts for luxury cars: a high-end BMW X3 with 70k kilometers on the odometer dropped from an initial listing price of 239.8k yuan to 188k yuan. A 2020 Mercedes-Benz E260, purchased on installment, saw its second-hand transaction price fall to over 140k yuan. An Audi Q5L with 30k kilometers was quoted at 170k yuan.

The emergence of such extreme market conditions directly reflects the intense upheaval currently occurring in the domestic second-hand trading system for luxury fuel vehicles.

As a sub-category in China's passenger car market that once possessed high premium capabilities and value retention attributes, luxury fuel vehicles were once widely known for holding their value.

However, against the backdrop of a qualitative shift in the domestic automotive market structure, aggressive pricing strategies in the new car market are rapidly transmitting to the second-hand circulation link.

From a price stratification perspective, the segment most severely impacted by new energy brands and new car price cuts is mainly the mainstream luxury range of 300k to 1 million yuan, where the decline in value retention rates has the greatest impact on the entire system. Meanwhile, older luxury cars are caught in a pincer movement between rising usage costs and high parts and maintenance expenses, severely inhibiting their liquidity.

In this round of changes, the price defenses of traditional luxury brands in the existing stock market are gradually collapsing, forcing second-hand car dealers' business models and consumers' asset valuation logic to be readjusted.

01 Value Retention Rates Decline One After Another

During the nearly two decades of growth cycles in the past, luxury cars in the Chinese market not only possessed the basic attribute of transportation but also carried strong social labels and class identification functions. This brand premium was directly reflected in the specific quotes of the second-hand market.

According to historical data from the China Automobile Dealers Association, the three-year value retention rates of mainstream German and other ultra-luxury brands remained stable at around 70% for a long period. During this time, the profit model of second-hand car dealers was highly dependent on this gentle and predictable depreciation curve. With fast vehicle turnover and high per-unit gross profit, the luxury car business was once the core profit source in second-hand car markets.

However, in recent years, the myth of value retention for luxury fuel vehicles has begun to quietly shatter.

The annual value retention rate reports from the China Automobile Dealers Association show that Porsche's three-year value retention rate dropped from 92.63% in 2022 to 67.34% in 2025, a decline of over 25 percentage points. Data for 2025 shows that the three major German luxury brands have all retreated to the 50% to 60% range. Specifically, Mercedes-Benz's three-year value retention rate is 58.50%, BMW's is 52.68%, and Audi's is 50.19%, all declining.

A senior luxury second-hand car dealer in Hangzhou, Liang Zhi (a pseudonym), told Wall Street Journal that the luxury cars with the most dramatic decline in value retention rates in recent years are those originally priced around 1 million yuan. This segment has been hit hardest by new energy brands. In contrast, for prices in the range of 1 million to 3 million yuan and above, the value retention rates of second-hand cars at this level are relatively stable. Their price declines are mainly affected by the weakening of overall consumer confidence, and the downside is not as obvious as for models below the million-yuan level.

Entering 2026, the value retention model built on brand scarcity and information asymmetry has failed more noticeably, with the most prominent features being "inverted new car and second-hand car prices" and "circulation stagnation." The above-mentioned dealer also said that continuous substantial price cuts in the new car market are already affecting the circulation of luxury second-hand cars.

At the same time, under the price transmission mechanism, this panic-driven decline has rapidly spread to the older second-hand luxury car market.

Taking an 8-year-old Bentley Flying Spur or Volkswagen Touareg as an example, their current terminal quotes of tens of thousands to over two hundred thousand yuan are essentially the results of market repricing and clearance. The core pain point for older luxury cars lies in their "full lifecycle maintenance costs."

As the vehicle ages, large-displacement engines, complex air suspension systems, and aging electronic architectures mean extremely high costs for parts replacement and labor. In current repair shops, the cost of a single major overhaul for some original million-yuan luxury cars may directly exceed the current second-hand transaction price of that car.

In the past, second-hand car buyers were willing to bear this premium for the brand halo. But in the current pragmatic consumer environment, the "negative asset" attribute of high fuel consumption and high maintenance costs is amplified, causing a decline in the willingness of end buyers to take over.

The cooling of the circulation link has further worsened prices. Survey data from the China Automobile Dealers Association shows that currently, nearly 80% of second-hand car dealers are operating at a loss on some luxury fuel vehicle projects.

To avoid the risk of inventory depreciation, a large number of car dealers have started adopting strategies such as "refusing to accept niche luxury cars with large displacement" or "acquiring at extremely low floor prices." The wholesale circulation of some older luxury cars among second-hand car dealers has even fallen into price competition.

Liang Zhi introduced that currently, many dealers abandon the pursuit of profit margins in favor of circulation efficiency.

He said, "Compared with a few years ago, our turnover rate and profit margin have been declining over the past two years, with the compression of profit margins being the most severe. The entire industry is facing inventory pressure. To ensure the safety of the capital chain, we can only exchange time for space now, placing extremely low importance on per-unit profit. The core purpose is to prioritize turnover speed, quickly free up funds to acquire other models for secondary sales, and prevent high-priced fuel vehicles from turning into dead assets sitting in our hands."

The supply side is eager to clear out, while the demand side has become cautious. This combination ultimately led to the current situation where million-yuan luxury cars have fallen to the price level of family commuter cars.

02 The Definition of Luxury Cars Has Changed

However, the collapse of the residual value system for luxury second-hand cars is not solely a circulation issue. It is a result of changes in the industry cycle, the supply-demand landscape of the new car market, and consumer evaluation criteria, all happening together.

In the first half of 2026, the "oil-to-electric transition" in China's passenger car market passed a key milestone. Data from the China Passenger Car Association shows that in May 2026, the retail penetration rate of new energy passenger cars in China reached a historic high of 62.9%. In that month, among the top ten best-selling passenger car models, all were absent of fuel models.

Behind this data is the shift in consumer car-buying mindsets and product evaluation standards. The squeeze on traditional fuel cars by new energy vehicles is not just about price competition but also about changes in experience standards.

In the passenger car market above 300k yuan, domestic high-end new energy brands represented by AITO, Li Auto, NIO, and Zeekr are seizing market share from traditional BBA (BMW, Mercedes-Benz, Audi) by redefining product definitions. Current high-end smart electric vehicles show significant differences from traditional fuel cars at the same price point in terms of cabin interaction, advanced smart driving assistance, NVH performance, and overall energy consumption.

When the average unit price of domestic new energy car brands gradually stabilizes in the range of 300k yuan or even 400k yuan, the mechanical quality and historical heritage that traditional luxury brands once prided themselves on are becoming less convincing to end consumers in the face of smart car experiences.

This technological and experiential gap has directly led to the shrinking terminal sales of traditional luxury brands in China.

For the full year of 2025, BMW delivered 625.5k vehicles in China, a year-on-year decline of 12.5%; Mercedes-Benz delivered 575k vehicles, down 19.5% year-on-year; Audi delivered 617.5k vehicles, down 5% year-on-year. The combined total of the three decreased by nearly 260k vehicles compared to the previous year, falling back to levels around 2017.

Second-tier luxury brands are in an even more difficult position. Porsche delivered only 41.9k vehicles in China in 2025, a drop of over 56% from the peak of 95.7k vehicles in 2021, marking four consecutive years of decline. Porsche's dealer network in China shrank from about 150 in 2024 to 114 at the end of 2025, with a target to further reduce to about 80 by the end of 2026.

Meanwhile, to maintain factory capacity utilization and basic market share, multinational luxury car manufacturers have had to engage in continuous price wars. Over the past few years, the new car prices of entry-level models from luxury brands represented by BBA have even dropped to below 200k yuan.

However, the strategy of trading price for volume is a double-edged sword. While it may have temporarily slowed the sharp decline in sales, over the long term, it has severely depleted brand assets and premium capabilities, further exacerbating their difficulties.

Driven by the shift in business focus and pressure on profit margins, some leading luxury brands have also undergone deep organizational restructuring in China.

In June 2026, Mercedes-Benz China launched a new round of layoffs. Beijing Mercedes-Benz Sales Service Co., Ltd. plans to reduce its workforce from approximately 900 to fewer than 600, with the layoff ratio exceeding one-third. At the manufacturing end of Beijing Benz, more than 2,000 employees had already left in 2025.

Due to weaker-than-expected performance in the Chinese market, BMW cut its full-year profit forecast for three consecutive years from 2024 to 2026. Among these, the most significant cut was in June 2026, halving the expected EBIT margin for its core automotive business from 4%-6% to 1%-3%.

The sales end is also adjusting.

Liang Zhi introduced, "Currently, in response to declining sales, the main measures taken by dealers and manufacturers focus on relieving marketing pressure. Now, manufacturers are trying not to force dealers to take on excessively high sales targets, to prevent dealers from irrationally engaging in price wars and selling vehicles at low prices to meet quotas. The primary goal is to barely maintain the brand's luxury tone in the existing stock market, and secondly, to stabilize the brand's declining value retention rate in the second-hand market from the source."

However, whether these strategies will be effective remains to be seen.

Dealers who once relied on selling luxury second-hand cars are also attempting to transition. Liang Zhi introduced that some second-hand car dealers that are struggling to survive have started exporting domestic new energy vehicles as second-hand cars to markets not yet formally covered by outbound automakers.

In his view, this transition strategy fits the current industry situation: imported luxury cars are struggling in the domestic market, while Chinese new energy vehicles are still seeing rising popularity overseas. According to the China Association of Automobile Manufacturers, from January to May, whole vehicle exports reached 268k units, a year-on-year increase of 63%. Among them, new energy vehicles accounted for 150k units, or over 45%.

The low-priced luxury cars in the Qingdao second-hand car market are just an external signal.

After continuous new car price cuts, domestic high-end new energy vehicles rewriting product standards, and consumers recalculating usage costs, the second-hand value of traditional luxury fuel vehicles is moving from brand myth back to business calculation.

The residual value reassessment for luxury cars like BMW and Mercedes-Benz is not over yet.

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