Much has been written about the decline in sales of European and traditional manufacturers in China. Volkswagens, Porsches and Mercedes have collapsed in a market that, until very recently, was key when it came to presenting results year after year. Have they collapsed? Not in all markets. In one they are still leaders.
Exactly, the one that no one cares about.
Leaders. A ranking where 18 of the 20 best-selling cars in China are not Chinese? Yes. It is the extra-luxury market, the one where cars that cost more than a million Chinese yuan are collected, almost 122,000 euros in direct exchange. They collect in CarNewsChina that in this list only BYD has made it among the best sellers.
The rest, 90% of the list, is made up of the so-called traditional brands. If we remove Lexus, which is Asian and enters with its Lexus LM (a minivan with a screen that crosses the entire width of the car) and its Lexus LS, the rest are European brands. Yes, Europe also rules in China but it does so in a market of ridiculous volume.
Porsche dominates here. The best-selling car over one million yuan is the Porsche Cayenne. Before its renewal that will offer an electric version, the Porsche SUV leads this table with 17,194 units sold in 2025. Land Rover closes the podium, which has placed the Range Rover and the Defender as the second and third best-selling car in this group.
Below, Porsche repeats again with the Panamera (fourth classified) and will appear again with the Taycan. But the brand that is most repeated is Mercedes. Cars signed by the brand appear up to seven times, although, yes, it accumulates the sales of the AMG and Maybach divisions separately. Their S Class (fifth, signed by Maybach, and sixth classified) are the best sellers. It also appears with the G-Class and the GLS.
The exception. From the Chinese market, only BYD penetrates this hyper-luxury market. It does so with the YangWang U8 and its even longer version, the U8L. This car, both versions of which have exceeded a thousand units, is a gigantic SUV with extended range options (plug-in hybrids with very wide electric range) that has become famous because it is capable of floating on rivers thanks to the enormous power of its wheels.
A drop in the ocean (1). There are two problems for European manufacturers. The first is more than evident: its sales are very low. Porsche, which in 2020 shipped almost 89,000 units in China has closed 2025 selling less than half (it has fallen short of 42,000 units). The drop compared to 2024 is 26%.
Mercedes boasted when it comes to presenting results of continuing to lead the extra-luxury market in the Asian country. The accumulated sales in this list exceed 38,000 units but the fact that the twentieth place is the Mercedes-AMG GLS with 83 units sold throughout the year gives an idea of its size and its competition. Yeah, Mercedes sold almost 460,000 units in China last year but it is 12% less than the previous year and is very far from the almost 775,000 units placed in 2020.
A drop in the ocean (2). This market, if we analyze its best classifieds, almost entirely lacks electric cars. The closest thing is the plug-in hybrid versions, like those offered by BYD. They are automobiles, pure gasoline ones, that are clearly declining in China. Where in 2020 17.8 million gasoline cars were sold Today 10.85 million cars of this type are sold.
New energy cars (plug-in hybrids and electric) already account for 60% of sales in the Asian country. In Autohomeexplain that this situation has weakened brands that have collaborations with European automotive companies. They give as an example the case of Maiteng, a company associated with Volkswagen that was a symbol of status and recognition and that has had to lower its prices to continue selling.
Right now, the market where European manufacturers succeed is the niche of the niche.
They don’t even consider it. But there is also another reason why Europeans succeed in this market. The Chinese don’t even consider entering it. With the market clearly betting on its local manufacturers, they are offering their most advanced cars at “affordable” prices compared to foreign manufacturers.
Already in his presentation, the Xiaomi SU7 Ultra highlighted its price difference with the Tesla Model S (DEP) and Porsche Taycan Turbo. While the first one came on the market with a price of 814,900 yuan (it would not be included in the previous list), the German one cost almost two million Chinese yuan.
The price war in China has pressured all companies to reduce their prices drastically. This has left out traditional companies that have found an evident loss of competitiveness in all types of markets, from general to luxury, where Chinese manufacturers are offering features and equipment typical of hyper-luxury segments in cars that, due to price, do not fall into that category.
Photo | Hong Wei Fan and Arthur Wang
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