Title: Mystery pricing, just to harvest investors?
Author: Kenvin
Introduction: Many people believe that, similar to the iX3, the iX will also experience a significant price reduction to boost sales. However, BMW is unwilling to immediately offer a sincere price to benefit consumers, and this abnormal behavior seems rather odd. Chinese consumers are no longer just looking at brand value; they are gradually leaning towards more technology, intelligence, products that are more in line with their needs, and more sincere automobile products, especially domestic brands.
At the last automobile event of 2021 – the Guangzhou Auto Show, major automobile brands presented their own treasures to boost year-end sales and create good publicity for next year. iX, as the new flagship SUV of BMW’s electric vehicle models, has received a lot of attention from fans since its debut. It also announced its official launch in the domestic market at this year’s Guangzhou Auto Show, with an official guide price of 846,900 yuan.
However, after the price of BMW iX was announced, it frightened a number of potential buyers who had been waiting on the sidelines, causing numerous discussions. Most people think that BMW has priced it too high and expresses concern over iX’s sales. Regarding the market pricing of 846,900 yuan for iX, let’s take a look at BMW’s pricing logic and reasons to see whether the hardware configuration, software strength, and interior design of iX are worth the nearly 850,000 yuan selling price.
The mystery of pricing, just to harvest investors?
iX, which is launching in the domestic market, only has one configuration, iX xDrive 50, with a price of 846,900 yuan. In overseas markets, BMW iX includes two models: xDrive40 and xDrive50, and it will probably launch more models in the domestic market later.
As a large and medium-sized pure electric SUV of BMW, iX’s exterior is similar in size to the BMW X5, with an aluminum body structure, high-strength steel, and a large area of carbon fiber reinforced composite. It is quite impressive for a mid-size SUV to achieve a drag coefficient of 0.25.
The BMW iX is equipped with front double wishbone suspension, rear five-link independent suspension, electronically controlled shock absorbers, low rolling resistance and noise-reducing tires, 17-inch sports brake discs, active limited-slip differential motor and other high-quality material parts. As a traditional well-known manufacturer, BMW’s cost advantage in terms of body structure, chassis tuning, and material quality cannot yet be achieved by ordinary manufacturers or new forces in the automotive industry.In terms of power, the BMW iX is equipped with a 105.2 kWh battery pack, and the WLTP-rated range is up to 630 km. In terms of motors, the xDrive 50 comes with a dual-motor powertrain, and the maximum output power of the front and rear axle dual-motor drive system is up to 370 kW, with a maximum power of 523 horsepower and an acceleration from zero to 100 km/h in just 4.6 seconds. In terms of electronic control, the BMW iX adopts the fifth-generation eDrive electric drive system with a modular concept. Additionally, the BMW iX supports the fastest 200 kW charging power, which can charge from 10% to 80% in 40 minutes, and a 10-minute charge can add 120 km of range.
In terms of intelligence, the BMW iX adopts a new generation of digital architecture and sensor system and has L3 level advanced driving assistance capability. At the same time, the BMW iX is the first model to use 5G technology, which can extend future autonomous driving functions through cellular V2X technology and OTA software updates.
In terms of configuration, the BMW iX equipped with front and rear dual motors, air suspension, and a 100 kWh battery pack has outstanding capabilities. In China, the direct competitor of the BMW iX is the Audi e-tron, but its price is not competitive at all.
The officially listed price of the Audi e-tron in China in April of this year is CNY 546,800-648,800, while the dealer’s offer is only CNY 442,800-525,800, with a discount of more than CNY 100,000 from the guidance price. As the domestic sales of the Audi e-tron in the past half year have been only 372 units, it is believed that there will be a larger discount for those who buy at the dealership. It can be seen that although the Audi e-tron has reduced the originally imported version’s guidance price from CNY 658,800-718,800 after achieving domestic production, it still cannot get rid of the reputation of being expensive and not cost-effective with oil-to-electric conversions, and the sales are dismal.
As the BMW iX has a similar size to its X5 model, the exterior design retains the traditional BMW-style SUV shape, except for a more distinctive, updated, and larger twin-kidney front grille. At present, the X5 sold in China is also an imported model, with an official guidance price of CNY 699,900-834,900, and the top-spec price seems to have little difference from the CNY 846,900 price set for the iX xDrive 50.
Therefore, we have reason to believe that the official guidance price of CNY 846,900 for the BMW iX xDrive 50 is completely based on the price of the imported high-end X5 model. However, as the actual transaction price of the iX3 has already been lower than that of the X3, it can be seen that the price system of “oil and electric at the same price” is no longer feasible, and BMW needs to rethink the pricing logic of its electric vehicles.Recently, the declaration drawings of the domestic BMW X5 were obtained from the MIIT (Ministry of Industry and Information Technology). This indicates that the domestic production of the BMW X5 will be carried out in BMW China’s Shenyang factory. This is also another large-scale luxury SUV localization for BBA, following the domestic Audi Q5. Industry insiders estimate that after localization, the starting price of the X5 will drop to around 550,000 yuan, with the top configuration price estimated at around 680,000 yuan.
At present, the BMW iX has announced its overseas market price, with a starting price of 83,200 US dollars, equivalent to about 530,700 yuan. All indications suggest that the domestic BMW iX will be priced at a more acceptable level and should still be at the same level as the domestically produced Audi e-tron. So, what is BMW’s intention behind releasing the “sky-high price” iX? To reap benefits from a potential spike in prices?
Trouble is brewing, how to wake up this sleeping BMW?
In China, there are not many BMW new energy models on the road. The pure electric iX3 and plug-in version BMW 5 Series are currently relatively high-visibility models. BMW Group stated that sales of new energy vehicles have continued to grow, with deliveries in China exceeding 32,000 in the first three quarters of 2021, a year-on-year increase of 57.4%.
However, this growth is based on the trade-off between price and quantity, as well as frequent quality problems. After experiencing a significant price cut of 70,000 yuan through an official announcement, the iX3 recorded a cumulative sales volume of 16,157 in the first month of 2021, while the sales volume of the plug-in version BMW 5 Series in the first 10 months was 19,736.
Both the BMW iX3 and the plug-in version BMW 5 Series have frequent power battery failure problems, with the iX3 jumping to the top of the SUV complaint list in November. BMW also privately sent recall information to iX3 owners, as high-voltage batteries have safety concerns and require recall for disassembly and repair.
Moreover, the plug-in version BMW 530Le had a mass battery failure problem as early as 2018. During normal driving or when encountering bumpy roads, fault codes such as transmission system failure and electric driving restrictions popped up on the vehicle’s central control display. The rumored sky-high cost of 300,000 yuan for battery replacement caused collective complaints from owners, who demanded free battery replacement to eliminate safety hazards.
Therefore, it can be seen that both the plug-in version BMW 5 Series, a transitory product produced domestically in the early days, and the iX3, along with oil-to-electricity representative works, all have electric battery safety concerns to varying degrees.It is worth noting that for the battery problem of iX3, many people attribute it to the Ningde era 811 problem, which is actually a case of mistaken identity. According to BMW’s own admission, the problem with iX3’s battery is loose soldering points, which is a problem with the battery pack manufacturing. The iX3 battery pack is designed and manufactured by BMW.
The lack of fundamental technology is just an overt feature of BMW’s fatigue in coping with electrification. The latent feature is that BMW has not yet realized that the times have changed, which is the most fatal. Of course, this is not just BMW’s problem. The luxury triumvirate BBA has similar problems.
It is not an exaggeration to say that BBA is still immersed in the luxurious and expensive sense of superiority of the gasoline era, completely unaware that in the era of electric cars, high-end players such as Tesla, NIO, GAC, and Ideal have emerged in China, and they have quickly entered the luxury car battlefield and have potential to overtake in the curves. Even BBA’s German base camp was taken down by Tesla in one fell swoop.
Therefore, at the end of 2021, BMW launched the iX for 846,900 yuan, and still hoped to maintain the aura of the million-dollar luxury SUV X5. This seemed too naive.
At the Guangzhou Auto Show, an interesting phenomenon occurred. Many potential buyers who were originally interested in iX turned their heads to the newly launched Cadillac LYRIQ, which is sold for only 439,700 yuan, less than half the price of iX, and looks sincere.
Many people believe that iX will experience a substantial price drop process, just like iX3, to boost sales. However, BMW is unwilling to come up with a sincere price to pass on the benefits to consumers. Such deformity is truly embarrassing to watch. Chinese consumers no longer only care about brand value. They will gradually tend to more technological, intelligent, more fitting with Chinese people, and more sincere car products, especially domestic brands.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.