Cadillac to compete with premium Germans in China – builds 3 models image

Even if auto sales in China rose only 4.5 percent last month, most of the major automakers are counting on China for even more expansion.

Luxury brand Cadillac boosted sales by 35 percent to 2,745 units last month, mostly on the back of its SRX premium sport-utility vehicle.

But to avoid the pricey tariffs that China slaps on imported cars, GM now plans to build 3 Cadillac models in China within a year, Joel Ewanick, GM’s global marketing officer said.

Because of the high Chinese tariffs and taxes already in place, the vehicles are sold only in the thousands or even hundreds in China, and only to the most affluent. For example, a Jeep Grand Cherokee that begins at $27,490 at dealerships in the United States costs $85,000 or more in China.

The US based automaker is expected to announce April 22 during the Beijing auto show that it will begin to build its all-new large Cadillac sedan, the XTS, later this year in China, according to another source familiar with the company’s plan, DetroitNews reports.
The first China-made XTS will hit the market sometime around March next year and it will be made by the Shanghai-GM joint venture.

In addition, GM would probably start assembling the ATS; and its popular midsize luxury sedan, the CTS, Ewanick said during an interview last week at the New York International Auto Show.

G.M. is a leading producer of automobiles in China, through a series of joint ventures with Chinese partners.

China’s new tariff on US car imports

Back in December, China’s commerce ministry said it was taking action in response to damage to its car industry from US “dumping and subsidies”. Individual duties on each company range from 2% to 21.5% and will be levied on imported cars and SUVs with engines larger than two litres for two years, the commerce ministry said.

The decision to tax US-made cars came after China lost a two-year battle over tyre exports to the US in September.

Under the new policy, anti-dumping duties on GM cars stand at 8.9 percent, with the rate for models made by BMW at a plant in the United States at 2.0 percent, the ministry said.

Cars made by GM are now subject to a 12.9 percent anti-subsidy duty, while the rate for Chrysler models is 6.2 percent.