Chinese brands head upmarket to take on Audi, BMW, Lexus and Mercedes

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Chinese car brands are lining up to take ambitious shots at Audi, BMW, Lexus and Mercedes-Benz after 16 years of tempting Australians with cheap cars.

MG this week confirmed its plans to launch its luxury sub-brand IM in Australia, starting with the electric IM5 sedan and closely related IM6 SUV.

The expected move follows recent news that compatriot BYD is bypassing its local distributor EV Direct to introduce the manufacturing giant’s own luxury spin-off called Denza.

A Lexus LX and Mercedes GLS rival in the form of the U8 plug-in-hybrid large 4WD is set to be the first model in Australia featuring the Denza badge.

The U8 is 5.3 metres long and powered by a petrol-electric powertrain with 880kW and 1250Nm, plus a WLTP EV-only driving range of 124km.

Four hub-mounted electric motors not only deliver all-wheel drive but give the U8 ‘tank turn’ (or spin on the spot) capability. 

Pricing in China is the equivalent of $250,000, far above the relatively affordable pricing of BYD models already sold in Australia.

The Lexus LX costs between $156,000 and $220,000, with the GLS Mercedes costing from $189,000 up to $420k for the ultra-luxurious Maybach version.

Another strong candidate for the Denza sub-brand in Australia is the B5 plug-in hybrid large 4WD that shares much commonality with the BYD Shark 6 ute.

MG has chosen the unusual brand name ‘IM Presented by MG Motor’ to keep the MG association rather than market IM as an entirely new name.

IM stands for ‘Intelligence in Motion’ and the brand from MG parent company SAIC includes a notable shareholder in the form of online retail giant Alibaba.

Pricing for the IM models has yet to be confirmed, though they are expected to be positioned closer to their equivalent (if slightly smaller) Tesla models – the Model 3 sedan and Model Y SUV – rather than similar electric models from the likes of BMW and Mercedes.

The Zeekr premium brand owned by another Chinese manufacturing giant – Geely – arrived in Australia in late 2024 with the X compact electric crosser that’s related to the Volvo EX30.

While the Zeekr X is priced from $56,900, the Zeekr 009 electric people-mover has recently arrived as another rare Chinese car to cost more than $100,000.

With a price tag of $135,900, it joins the LDV Mifa 9 – another electric people-mover, priced between $104K and $129K – and MG Cyberster electric sports car ($115,000 plus on-roads) as Chinese cars with six-figure stickers.

Many more Chinese brands are queuing up to launch in Australia, though the majority will be playing in the mainstream space.

Nio has been flirting with the idea of selling its premium vehicles here for a couple of years but has gone quiet of late, though Geely-Volvo spin-off brand Lync & Co looks set to come here via the same importer responsible for introducing Zeekr, another Geely-owned brand.

Value will remain a key selling point even for the more ambitious Chinese brands. Expect them to typically offer more features and more performance than the equivalent model from any of the established European or Japanese luxury marques.

This approach has already contributed to a shrinking of vehicle sales for European car makers who once dominated China’s luxury car segment.

It all but guarantees that the local arms of Audi, BMW, Lexus,  Mercedes, and even Porsche won’t be too complacent about these emerging brands.