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GM wants Chinese drivers styling in Cadillacs

 

General Motors Co is aiming high in China's auto market - high-end, that is.

Hoping to capitalize on the growing appetite among Chinese for luxury cars, GM's pitch in China is highlighted by a trio of Cadillac sedans.

The redesigned Cadillac CTS that will go into production later this year and Cadillac's ATS and XTS models are expected to drive a 50 percent jump in sales of the luxury nameplate in China, GM's Cadillac brand chief Bob Ferguson said. US Cadillac sales are expected to rise 32 percent.

The remarks by Ferguson, made on Tuesday as the world's No 2 automaker unveiled its new CTS ahead of the New York International Auto Show, came a month after he said he expected Cadillac sales in China to triple to 100,000 by 2015.

Raising the brand's standing in China has been one of Ferguson's goals since taking over as Cadillac chief in October. The redesign of the CTS into a larger, more powerful car with dramatic new styling reflects GM's effort to win over Chinese luxury-car buyers, who tend to favor German brands BMW, Audi and Mercedes-Benz.

Ferguson has said he believes Chinese buyers will embrace the brand.

"I think some people intuitively felt the way to sell Cadillacs there is somehow to make Cadillac have more of a Chinese aura," the executive told the Detroit Free Press in February. "In fact, I think we're learning the opposite, which is that they're interested in the product because it is American luxury."

With more than 200 dealerships in China, Cadillac is on pace to sell 45,000 to 50,000 cars in China this year, compared with over 187,000 US sales, GM said.

The US company, which is vying with Germany's Volkswagen AG for the title of biggest foreign automaker in China, plans to start making its smaller, entry-level ATS in China later this year. Production of the XTS at a Shanghai plant began in February.

David Zoia, editorial director of industry website WardsAuto.com, said GM is on the right track in its bid to attract luxury-car buyers in China by offering a revamped CTS.

"No matter what market you're talking about, new product typically is what drives sales growth," he said.

"The China market continues to grow at a relatively healthy rate, and sales of luxury models in particular are expanding. With its new ATS and XTS models and an even more competitive CTS on the way, Cadillac appears well positioned to take advantage of that," Zoia said.

For February, GM reported an 8.1 percent increase in the sales of Cadillacs in China from the same month last year, to a record 2,295 units. That was largely due to strong sales of the Cadillac SRX luxury utility vehicle. Global management consulting firm McKinsey & Co has said China is on track to become the world's second-biggest market for luxury cars by 2016 and the market leader by 2020.

McKinsey projects that deliveries to China of luxury cars - priced at $50,000 and up - will reach 2.25 million by 2016 and 3 million by 2020. Last year, luxury-car sales in China totaled 675,000, accounting for 5 percent of all passenger vehicles sold.

Volkswagen is stepping up its game. Two weeks ago, CEO Martin Winterkorn said that over the next five years VW will build new plants and increase production capacity in China to meet demand.

VW, he said, will build "a minimum" of 10 plants outside of Europe in the next few years, including seven in China.

"We will be increasing our production capacity in China to more than 4 million vehicles a year - in line with the boom in demand there - in the period to 2018," Winterkorn said.

 

 
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