Chinese Automobile Circulation Association Officially Establishes Dealer Branches for Mercedes-Benz, BMW, and Porsche

When the Chinese dealerships of the three luxury brands—Mercedes-Benz, BMW, and Porsche—decided to "band together" by establishing their respective official branch associations, this was by no means a simple industry organizational event. It sent a clear signal: even the most elite "fleet" felt unprecedented waves in what was once the golden waters of the Chinese automotive market and is attempting to adjust course and secure its anchors through internal coordination.

Almost simultaneously, data disclosed by Cui Dongshu, Secretary-General of the Passenger Car Market Information Association, provided a macro-level footnote for this move. In the first quarter of 2026, China's share of the global automotive market fell from a staggering 35.4% in 2025 to 30.9%. Although this was attributed to seasonal factors such as the Spring Festival, the year-on-year decline in global sales growth (only 1%) and the negative start for China's own auto market undoubtedly together paint a picture of weak demand and fierce competition. The establishment of the dealer branch associations is the most direct response and self-rescue effort by frontline practitioners facing this "chill."

Why did luxury brand dealers choose to "form associations" at this time? First, it is an inevitable response to the reshaping of channel power structures. In the past, the game between brands and dealers was relatively straightforward. Today, under the combined pressures of price wars, the impact of direct-sales models, and the digitalization of user operations, individual dealers' influence is increasingly diminishing. Establishing branch associations allows for a unified voice to communicate more effectively with brand headquarters, striving for more favorable conditions in areas such as business policies, inventory management, and support for digital transformation. Second, it is a survival strategy to cope with the transition to new energy vehicles and competition from new forces. Traditional luxury brands face growing pains in aligning their electromobility and smart technology strides with their extensive dealer networks. The associations can serve as information hubs, accelerating experience sharing and consensus-building within the network to jointly study how to counter the "cross-dimensional strikes" from new car-making forces that operate via direct sales, transparency, and community-centric models. Finally, it is also about resource integration during a market downturn. In the stage where market growth shifts from incremental expansion to competition within existing volume, sharing resources through the association platform, coordinating regional market strategies, and even jointly conducting marketing activities can help reduce internal friction and enhance the health and risk-resistance of the entire network.

However, establishing the associations is only the first step; it is more of a defensive structural adjustment. The real challenge lies in whether this new organization can transform into an effective offensive force. As China's market share temporarily fluctuates and domestic consumers have been thoroughly educated by the "equalized experience" of intelligent features from local brands, luxury brands face not just fluctuations in sales but a challenge to the very core of their brand value. The mechanical performance, historical legacy, and identity symbol represented by Mercedes-Benz, BMW, and Porsche are seeing their weight shift within the younger generation's perception system of "technological luxury" and "experience luxury."

Cui Dongshu predicts the auto market will strengthen in the second half of the year, but for luxury brands, even if the broader market rebounds, their growth logic will have fundamentally changed. Future battles for market share will be more deeply tied to their rebuilding of product competitiveness on the intelligent electric track and whether their dealer networks can successfully transform into high-quality, high-engagement user service and experience centers. The associations' ability to drive this transformation, rather than merely maintaining the old balance of interests, will determine their true value.

Therefore, this collective debut of the branch associations for the three major brands is more akin to a prelude. It marks the end of an era in China's luxury car market that relied on brand halo and extensive growth, and the beginning of a new phase requiring more refined operations and deeper coordination to tackle complex challenges. The waves have arrived, and the fleet has assembled. Whether it can navigate the cycle smoothly depends on whether the fleet can unite as one and row with all its might in the right direction.