Luxury-car sales are very profitable for large automakers. Audi earns about half of VW’s total global profits. Cadillac’s share of GM’s is much smaller, but CEO Dan Akerson is determined to increase that.
Akerson has launched a multi-year push to improve Cadillac’s cars and image to the point where it is competitive with the German luxury brands all over the world. Part of that plan involves China: Akerson wants to triple Cadillac’s sales in China by 2015, to 100,000 vehicles a year, and aims to capture 10% of China’s luxury-car market by 2020.
That’s where this new factory comes in. Imported cars are hit with steep taxes in China, so being competitive means building locally. GM already builds some Cadillacs in China, including its best-selling SRX crossover and the big XTS sedan, shown above, which was just launched in China earlier this year.
I expect that this new factory will be configured to build GM’s rear-wheel-drive Cadillacs, the compact ATS sedan and the upcoming new mid-sized CTS sedan. General Motors Company (NYSE:GM) has also hinted at a big “flagship” Cadillac sedan that would rival the Germans’ top of the line models; if that car goes into production, it could be built in this new factory as well.
Those Chinese Cadillacs are unlikely to be sold here
One more thing to be clear about: While it’s possible that some of the Cadillacs produced in China will be exported, it’s very unlikely that they would ever be sent to the U.S. GM currently builds the ATS and CTS at a very modern factory in Lansing, Michigan. Those are the cars sold to Americans, and that’s unlikely to change any time soon.
The article GM Will Build More Cadillacs – in China originally appeared on Fool.com and is written by John Rosevear.
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