GM Gets Approval for the $1.3B Plant in China image

GM got the Chinese government’s approval to build a $1.3 billion plant in the country, where it will manufacture Cadillac vehicles.

GM plans to increase its luxury car market share in China, which is currently dominated by BMW and Audi. By building cars in China, GM will be able to reduce the costs of its vehicles, taking into consideration that Beijing imposes high duty imports of luxury cars. Even if the demand for luxury vehicles in China has continued to grow, GM was not able to tap into the fast-increasing segment.

Last year GM sold 30,000 Cadillac vehicles in China, while BMW sold 327,341 units and Audi sold 405,838 units. GM stopped production of the Cadillac SLS in the Asian country after the model was replaced with the XTS.

GM’s new plant will be located n Shanghai’s Jinqiao zone and its construction will begin in June, as it got the approval from the National Development and Reform Commission. The automaker will invest around $1.3 billion and the plant’s annual capacity will be 150,000 vehicles.

Earlier this year, GM said in its annual report that “growing Cadillac sales in China is a priority. Our goal is to triple sales to 100,000 units within two years,” it added.

Source: Bloomberg