The launch of the Cadillac XTS in Shanghai.
General Motors has begun assembling the new full-size Cadillac XTS at a sprawling production complex in Shanghai, a key step in the maker’s goal of tripling sales of the luxury brand across China over the next three years.
Cadillac sold 30,000 vehicles in the booming Chinese market in 2012 and has set sites on topping 100,000 sales annually by 2015 as it adds new models, including the Cadillac ATS and the Cadillac ELR, a high-line extended-range electric vehicle that will share its drivetrain with the Chevrolet Volt, GM officials said this week.
“We are reaching the next level of Cadillac growth in China,” said Bob Ferguson, vice president of global marketing for Cadillac. “This expansion in localized assembly for our brand in China coincides with the strong momentum of our new product portfolio and significant growth in the dealer network.”
While GM has been a dominant force in China for more than a decade, battling rival Volkswagen AG for sales leadership, Cadillac has been a relatively minor player, especially when compared to key luxury rivals such as Mercedes-Benz and BMW. A key factor has been the lack of local production which means Caddy imports are subject to significant duties. The Chinese luxury car market has become increasingly price sensitive, even forcing Mercedes to cut prices on the flagship S-Class line last year.
Cadillac will follow the XTS with local production of other models, GM CEO Dan Akerson has indicated. The sedan is being produced at a factory GM shares with its principal Chinese partner SAIC or the Shanghai Automotive International Corp.
Shanghai joins Oshawa, Ontario, as an assembly location for the XTS, marking the brand’s biggest step in its expansion since arriving in China in 2006.
Meanwhile, Cadillac’s dealer network in China has doubled to more than 150 locations in the past year. It is planned to reach 250 outlets in the next two years.
With the Chinese economy showing new signs of life, General Motors and its joint ventures sold more than 300,000 vehicles in a single month for the first time during January. If the pace is sustained over the next 11 months, GM sales in China could top 3.5 million units. The maker celebrated topping the 2.5 million mark just two years ago.
Ferguson said the addition of the Cadillac XTS is an important milestone in GM’s growth in China. The sedan offers a range of technology the maker believes will click with tech-savvy Chinese buyers, such as standard Magnetic Ride Control, the CUE system for connectivity and control and advanced safety systems, he said.
The spacious interior of the XTS is a good fit in China, where luxurious space is highly valued, Ferguson added.
The XTS will be sold in China with two engine options: a 2.0-liter turbo inline-four and a 3.6-liter V6. It will range in price from RMB 349,000 to 569,000, or $55,984 to $91,275.
“We’re poised to move to the next level,” Ferguson said. “Growth in the Chinese market is essential to any top-level luxury auto brand, and it boosts our brand and our business everywhere including in the U.S.”
Paul A. Eisenstein contributed to this report.
There are those who believe that much of the bail-out money was used to launch products in China by GM… There was even a video that chronicled the activities of GM in China and their speeches stating their intent to export as much of U.S. production and jobs as possible to China. IMO GM should repay every dime plus interest for the tax payer funded bail-out loan. This wasn’t a gift, it was a monetary loan.
One could clearly argue that GM is getting off cheap. On the other hand, I think the country is better off for still having this big company around. As to China, should GM have essentially downplayed this huge and profitable market or gone after it as a way to boost its global profits and long-term viability?
Paul E.