Luxury sedans like the 3-Series are losing ground to SUVs across Europe, with new data showing a sharp decline legacy brands can’t ignore
It’s no secret that Europe’s premium carmakers are facing tough conditions, and the segment they classify as luxury mid-size sedans, known in North America as premium compacts, is bearing the brunt more than most.
Once a staple of the executive car park, these models are now slipping down the sales charts as consumer preferences shift and market pressures mount. For brands like BMW, Audi, and Mercedes, the latest numbers make for a sobering read.
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Sales across the premium mid-size sedan category dropped 19 percent in the first ten months of 2025, falling to 241,096 units. The BMW 3-Series still leads the segment, but it hasn’t escaped the downturn. Registrations of the model are down a worrying 23 percent year-over-year, now totaling 60,237 units.
The newly launched Audi A5, which replaces the previous A4, is holding its ground in second place. With 53,483 units sold so far this year, it’s been a bright spot for Audi in an otherwise sluggish category. The same can’t be said for some of its rivals.
Figures from Dataforce, published by Autonews Europe, show that Mercedes-Benz sold 14 percent fewer C-Class units this year, with volume dropping to 41,335. BMW’s all-electric i4 is also slightly down, slipping 1.6 percent to 36,982 units.
It’s a similarly bleak picture further down the list. The Volvo S60 and V60 combined for 16,476 sales, marking a 35 percent drop. Polestar 2 sales fell 26 percent to 14,099, while the BMW 4-Series declined 12 percent to 10,081 units. Alfa Romeo’s Giulia, despite a loyal following, also posted a 20 percent decline.
Model availability hasn’t been the only challenge. Auto News reports that car buyers have started shopping in other segments. For example, there’s strong demand for midsize SUVs, including those with plug-in hybrid powertrain options like the BYD Seal U.
Even so, there’s some cautious optimism that the segment may eventually stabilize or bounce back.
New Options Are Coming
Some automakers are betting on electrification to reverse the segment’s fortunes. BMW is deep into development of the next-generation 3-Series, which will be offered in both combustion and electric versions.
The EV, expected to carry the i3 badge, will use technology from the upcoming iX3. That includes a more efficient powertrain and improved range, making it a key product in BMW’s electric strategy.
Mercedes is taking a similar route with the next-gen C-Class, set to arrive next year. The upcoming electric version will share its underpinnings with the new GLC SUV, pointing to a more scalable and EV-focused platform approach.
Germany remains the largest single market for these midsize premium sedans, holding a dominant 37 percent market share. Sales have slid considerably in the UK, dropping 26 percent and reducing its market share to 16 percent.
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Brad Anderson’s lifelong affair and fascination with cars started young. Before even graduating high school,… Read full bio

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