Cadillac Aims At Smaller China Cities to Increase Luxury Market Share image

As competition intensifies in China, GM plans to triple sales of its luxury Cadillac unit by 2015.

To attract wealthy customers in smaller Chinese cities, GM will introduce in the region Cadillac’s global portfolio and add a locally manufactured model each year until 2016, according to Bob Socia, GM’s China head. GM also aims at increasing the number of its dealerships in the country to 200 in 2013 from 70 dealerships in 2011.

“At the moment, tier-one cities’ market is large but the market is getting saturated,” Kevin Chen, general director of the Cadillac division at Shanghai GM, said yesterday in an interview at the Shanghai Auto Show. “But tier-two and tier- three, there’s high potential for growth.”

GM CEO Dan Akerson said that in order to compete with BMW and Audi, Cadillac must close the gap with its rivals by more than doubling sales to three million units by 2020. In 2012 Cadillac sold 30,010 units in China, compared with Audi’s 405,838 units and Mercedes-Benz’s 196,211 units. In order to attract as many customers as possible, GM signed a contract with Brad Pitt, who will promote the Cadillac brand.

GM plans to sell 100,000 units annually in China by 2015, which would be 10% of the luxury market and most of the Cadillacs sold in the region will be manufactured locally to cut costs and face the currency fluctuation.

Source: Bloomberg