People walk past a second hand market for luxury cars in Beijing, Tuesday, Nov. 25, 2025. (AP Photo/Andy Wong)2025-12-14T02:05:04Z HONG KONG (AP) Chinese demand for foreign luxury cars is waning as customers opt for more affordable Chinese brand models, often sold at big discounts, catering to their taste for fancy electronics and comfort.That is bad news for European carmakers like Porsche, Aston Martin, Mercedes-Benz and BMW that have long dominated the upper reaches of the worlds largest auto market. A slowing economy hits the luxury marketA prolonged property downturn in China has left many consumers with little appetite for big purchases. Meanwhile, the well-to-do are becoming increasingly shy about publicly displaying their wealth, said Paul Gong, UBS head of China Automotive Industry Research.Many car buyers have been swayed by a 20,000 yuan ($2,830) trade-in subsidy offered by the Chinese government for purchasing electric and plug-in hybrid vehicles. People tended to purchase cheaper, entry-level cars where the discount will count more and those cars are mostly Chinese made, Gong said.Slowing economic growth is one key driver behind weaker demand for premium cars, said Claire Yuan, director of corporate ratings for China autos at S&P Global Ratings, referring to a segment that typically counts car brands such as Mercedes-Benz and BMW. The market share of premium car sales in China, usually priced above 300,000 yuan ($42,400), more than doubled between 2017 and 2023 to about 15% of total sales, S&P said.That trend is now reversing. The share of premium cars sales fell to 14% in 2024 and to 13% in the first nine months of 2025, S&P said. Chinese automakers take a bigger biteWhile luxury auto sales have slowed, Chinese manufacturers, including electric vehicle maker BYD, have become more aggressive than many Western brands in technological innovation, frequently rolling out new electric vehicles and hybrids at cheaper prices, including premium vehicles, analysts said.Their (Chinese carmakers) products are more competitive and more affordable even in the premium segment, Yuan said. Thats why these foreign brands are gradually losing momentum.The Chinese brands share of passenger car sales climbed to almost 70% in the first 11 months of this year, according to China Association of Automobile Manufacturers. It reported Thursday that German brands held a 12% share, Japanese brands around 10% and U.S. brands nearly 6%.BYD already has overtaken Volkswagen as the biggest car seller in China in recent years. BYD is so far the best selling car brand this year in China for new energy vehicles, which include electric vehicles and hybrids, according to the China Passenger Car Association. BYD had cut prices of its electric and plug-in hybrid models by up to 34%, putting pressure on major rivals like Geely and Leapmotor. Mercedes-Benzs sales by units in China fell 27% from a year earlier in the July-September quarter, according to its latest earning report. The number of BMWs and its subsidiary-brand Minis sold in China dropped 11.2% year-on-year in the first nine months of 2025. Porsche and Aston Martin also cited pressure from weaker demand in China. Italian luxury carmaker Ferrari reported a 13% year-on-year drop in car shipments to mainland China, Hong Kong and Taiwan in January-September. It was the only region where sales declined during that time.Ola Kllenius, CEO of Mercedes-Benz, told investors in late October that hyper-competition in China is not going away anytime soon. The market situation in the premium and luxury segment in China remained tense, the carmaker said. Used luxury cars going for cheaperThe downturn in interest in luxury vehicles is hitting dealerships hard.Li Yi, a salesperson in charge of second-hand cars at a Beijing Porsche center, said a 2024 Panamera 2.9T with a mileage of about 20,000 kilometers (12,400 miles) was priced at 950,000 yuan ($134,300). The previous owner bought it for about 1.4 million yuan ($198,454).Its mainly due to the sluggish economic situation, Li said. (Its) not only Porsche. Benz, BMW, Bentley and Rolls-Royce all face the same situation. Porsche and Bentley are part of the Volkswagen group.At a used-car market in Beijing, four other car dealership representatives who spoke to The Associated Press described a similarly grim situation, with premium cars selling at significantly lower prices over the past year. Chinas monthly auto production in November surpassed a record of 3.5 million units for the first time, the CAAM reported Thursday, but domestic auto sales dropped 4% year-on-year under fading demand as some trade-in subsidies were halted in some regions.Who still has money these days? Peoples pockets are cleaner than their faces, joked one used car salesperson who identified herself as Hao. Prices have been sliding for two years and she offers bigger discounts, said the salesperson, who did not give her full name as she was not authorized by her company to speak to the media. Now they think hard before they spend, she said.___Associated Press researchers Yu Bing and Shihuan Chen in Beijing contributed to this report. CHAN HO-HIM Chan covers China business, economy and finance for The Associated Press, reporting on key sectors from technology to trade. He is based in Hong Kong. mailto