GM to Build 13 Billion Cadillac Plant in China

GM to Build $1.3 Billion Cadillac Plant in China

The huge investment marks a bet that GM, the largest US auto maker, will be able to win a larger share of China's rapidly-growing luxury vehicle market, in which German brands hold an estimated 80% share.

SHANGHAI -- Chinese authorities have approved a $1.3 billion General Motors (IW 500/4) plant to make luxury Cadillac cars, the company said Tuesday as it seeks more premium sales in the world's biggest vehicle market.

Construction of the plant -- which will have annual capacity of 150,000 vehicles -- will start in June in the commercial hub Shanghai, GM China.

It will be run by Shanghai GM, a joint venture with China's SAIC Motor.

The huge investment marks a bet that GM, the largest US auto maker, will be able to win a larger share of China's rapidly-growing luxury vehicle market, in which German brands hold an estimated 80% share.

Analysts say GM is a laggard in the luxury segment, one of China's fastest growing and most profitable, given rising incomes in the country.

GM launched a Cadillac sedan, the XTS, in China earlier this year as it seeks to make inroads into the sector.

The company plans to introduce one new Cadillac model a year through 2016 to boost annual sales from 30,000 vehicles last year to 100,000 by 2015, a top GM official said last month.

"Our longer-term goal is to take Cadillac's share of the luxury car market to 10% by 2020," GM China president Bob Socia said.

GM's total China sales rose 11.3% last year to a record 2.84 million vehicles, according to the company.

China's market for "premium" cars -- costing up to $190,000 -- was 1.25 million vehicles last year, second only to the United States, according to consultancy McKinsey.

Copyright Agence France-Presse, 2013

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish