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