Monday, May 7, 2012

GM to build Cadillacs in China

General Motorrs is preparing to build three additional Cadillac models in China with the help of its principal Chinese partner, Shanghai Automotive Industry Corp. or SAIC. The cars are expected to compete for high-end Chinese buyers, particularly in major Chinese cities such as Beijing and Shanghai, who are willing to spend lavishly on European luxury cars despite some of the world’s most expensive licensing fees.
   The new Cadillac  XTS will be the first Cadillac built in China since its longer and will have the spacious back seat that appeals to wealthy Chinese buyers and communist party functionaries.
 GM also expects to eventually build other Cadillacs in China the  upcoming ATS; and the Cadillac CTS, which GM currently exports to China from its assembly plant in lansing, Mi. Cina, however, changed the rules of the game last year as the volume of luxury car sales increased, demanding that more luxury cars be built in China. It also slapped duties on imports such as the CTS to make sure foreign carmakers got the message. Mercedes-Benz BMW and Audi are all expanding capacity in China to meet the rising demand for luxury vehicles.
  Being able to compete with German carmakers in a market such as China would be a major step in GM’s efforts to re-establish Cadillac as a genuine global luxury brand, observers have noted.
Meanwhile,  slowing car sales have not bothered General Motors and its joint ventures in China. GM reported it sold 257,944 vehicles in March and 745,152 vehicles in the first quarter of 2012, setting March and quarterly records.
 GM’s domestic sales in March were up 10.7 percent from the same month in 2011. They were the second highest for any month in GM’s history in China. For the first three months as a whole, its domestic sales increased 8.7 percent, the best quarter since GM began doing business in China, the auto giant reported.


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