It is a major change for an industry that spent the last three years mired in a bitter electric vehicle price war and poses a huge threat to legacy premium automakers - both in China, the world’s largest auto market - and abroad.

“The price war has turned into a value-for-money war,” said Bo Yu, Greater China country manager ​at research firm JATO Dynamics.

China’s automakers have a message for premium German brands Porsche, Mercedes and BMW: We’re coming for ​your customers.

At this year’s Beijing Auto Show, which kicks off on Friday, the industry is set to debut 181 models and 71 concept cars, including ​a “flood” of big, premium “9-series” SUVs, according to Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), an industry group.

The fight for the premium ⁠market spells further trouble for German automakers in China. According to data from S&P Global Mobility, German automakers’ cumulative sales in China fell nearly 25% to 3.85 million vehicles from ​5.1 million in 2019.

Mercedes-Benz, BMW, Volkswagen units Porsche and Audi all posted sales declines in China in the first quarter.

The upmarket push will also intensify competition overseas. Chinese automakers are increasingly looking to ​go abroad after the price war left the domestic market flooded with cars.

China’s EV makers have been able to absorb European Union tariffs on Chinese-made electric cars and keep them priced below similar models from European rivals. Chinese hybrids and combustion-engine cars are not subject to EU duties.

“I expect more Chinese companies to double down on premiumisation,” said Stephen Dyer, head of consultancy AlixPartners’ automotive practice in Asia. “To differentiate themselves at ​home, but also to prepare for going global.”

Car sales in China fell about 18% from a year earlier in the first quarter and are expected to remain flat or down ​for the foreseeable future.

‘New king of the road’

Geely’s premium brand Zeekr last week unveiled the 8X, a full-size, long-range plug-in hybrid SUV laden with safety, infotainment and tech features.

The 8X can tilt upward before a ‌side collision ⁠to protect passengers. If the car is parked in a tight spot, the driver can wave at it, and it will drive itself out of the space to allow passengers easy access.

Geely showed a video of the 8X, which starts at under $53,000, vanquishing both the Porsche Cayenne and the BMW 5M - German premium models starting at around $135,000 and $205,000, respectively - in speed trials.

“This is the new king of the road,” Geely Automobile CEO Gan Jiayue told the audience at an event in Ningbo, about 200 km (124 miles) south of Shanghai.

Tu Le, managing director of consultancy ​Sino Auto Insights, said that by launching large ​premium SUVs, Chinese automakers are sending “a shot ⁠across the bow” of Detroit automakers General Motors, Ford Motor and Stellantis, which have specialised in these highly profitable models.

At the moment, US customers can’t buy Chinese cars, although many industry watchers expect that to change eventually.

“Detroit’s cash cow is no longer safe,” he said.

‘Unthinkable five years ago’

The ​rise of Chinese premium cars comes as consumer demographics and tastes have shifted.

CPCA’s Cui said the average Chinese car buyer’s age has ​increased to greater than ⁠40 from 30, while families want larger premium models, leading to falling demand for entry-level cars.

Chinese consumers are also increasingly drawn to the industry-leading technology of China’s EV makers, while younger buyers have no interest in the heritage that is German premium brands’ key strength in Europe, JATO Dynamics’ Bo said.

“German brands are stuck in the past,” she said. “But Chinese consumers want to embrace the future.”

Auto ⁠consultant Felipe Munoz ​said that while it was “unthinkable five years ago” that Chinese consumers would prefer premium local models over established ​German rivals, “foreign luxury and premium brands are now going to find it harder to survive in China.”

“The question is whether this will be the case outside China,” he said. “In Europe, German premium brands are a reference for quality.”

“That’s ​going to be hard to change,” Munoz added.