GM Pushes Cadillac in China to Capture Growing Luxury Auto Market

Apr 24, 2012 02:17 AM EDT

General Motors Co. announced on the first day of the Beijing Auto Show that the company plans to build its flagship Cadillac XTS luxury sedan in China for the growing auto market.

The introduction of new XTS, which will be in conjunction with joint venture partner Shanghai General Motors, will be a major landmark in the company’s global growth. According to the company’s statement, the production will begin this fall. Dan Akerson, the CEO of GM, spoke at the auto show that the model will be available later this year in the market. The growth in China will be rapid, as Akerson said Cadillac will add new model every year until 2016.

“China is the second-largest market for Cadillac, and of course is one of the largest and strongest markets in the world for luxury cars, so it is a core part of our vision as a brand,” said Don Butler, Cadillac vice president of marketing, in Monday’s statement.

“It is projected that by the end of the decade half of all luxury purchases in the world – all categories, not just cars – will occur in China.”

Cadillac, first introduced in China in 2005, has increased its sales quite a bit in the past few years. In 2011, 30,000 Cadillac vehicles were sold compared to 17,000 in 2010. Last month, the brand also had a monthly record of 2,745 units, which is 35.2 percent increase from March of 2011.

Even with the growth, however, Cadillac has a lot of room to catch up before surpassing Audi in China. The luxury brand of Volkswagen has sold over 300,000 units last year.

GM has called the expansion of XTS production in China as the “biggest step in Cadillac’s growth” in a statement and this may help GM to stay ahead of VW in the global market.

Interestingly, Cadillac attracts younger generation in China. GM reported that the average age of a Cadillac buyer in China is 35. In United States, it is 63, according to J.D. Power & Associate.

“We’re very encouraged by the positive response Chinese luxury consumers have to Cadillac,” said Butler.

“Qualities like innovation and entrepreneurship are admired by many luxury consumers in China, which aligns well with Cadillac,” Butler added.

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