CHINA: General Motors bets on luxury cars and minis - report
19 Nov 2003
Source: just-auto.com editorial team
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General Motors is betting on strong growth in both China's luxury car market segment and an underdeveloped minicar market for the success of domestically-produced Cadillac and Spark models, a company executive told Dow Jones Newswires.
GM's decision to add upper-market Cadillac models to the company's China-made brand line-up is aimed at tapping the soaring demand for luxury vehicles, GM China Group's chief executive Phil Murtaugh told the news agency.
"The luxury segment is booming in China," Murtaugh reportedly said, adding: "It's small on a comparative basis, but it's an opportunity (so) we just thought that with the Cadillac portfolio that we have now, we think we have an extremely competitive product."
Dow Jones noted that General Motors announced earlier this month that it will add Cadillacs to its current China model line of Buick and Chevrolet brands by expanding manufacturing capacity at its joint-venture facility with Shanghai Automotive Industry Corp. ( Group), or SAIC, by 50%.
Capacity at the plant in the eastern coastal city of Shanghai will increase to 300,000 units by the end of 2005, but GM hasn't confirmed when Cadillac production will actually begin, Dow Jones said, adding that GM currently claims an 8.2% share of China's car market, compared to about 33% for market leader Volkswagen.
GM's move to bring the Cadillac to China indicates how foreign car manufacturers and their joint venture partners are scrambling to satisfy a new generation of urban Chinese consumers whose rising disposable income levels have spurred a passenger car sales boom, Dow Jones said.
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