GM gears up its Cadillacs in China ( 2003-11-05 14:00) (Agencies)
Red Flag limos, move over. Cadillacs are on the way.
General Motors Corp said yesterday it plans to boost its manufacturing
capacity in Shanghai by 50 per cent to build Cadillacs, expanding its push into
the luxury end of the world's fastest growing auto market.
GM, which already markets Buicks and Chevrolets in Shanghai, said it
would sell both imported and domestically assembled Cadillacs. To meet rising
demand, it plans to expand production capacity at its factories in Shanghai and
in southern China.
Building Cadillacs inside China would allow customers to avoid paying high
import duties.
"We are excited about expanding our presence in China in order to keep up
with the rising demand for vehicles, especially passenger cars," Rick Wagoner,
GM's chairman and chief executive officer, said in a statement.
GM did not provide details on its plans for the Cadillac, including which of
the eight models it will sell here, how much they will cost or how many the
company expects to sell. Competition for China's fast expanding market has been
heating up, with GM, Ford, Honda, Nissan, Toyota, Bayerische Motoren Werke AG
and DaimlerChrysler AG all recently announcing plans to expand capacity to keep
up with explosive demand. Vehicle sales in China soared 30 percent in the first
nine months of this year.
GM, which claims an 8.2 percent share of China's vehicle market, says its
sales by late September had already surpassed the total for last year, with
267,395 cars sold.
The world's biggest carmaker started with Buicks at the Shanghai plant in
1998 and says it has invested more than US$2 billion in the country through a
number of joint ventures, which now make domestic brands as well as Buicks and
Chevrolets.
Cadillacs will be assembled alongside Buicks at GM's Shanghai plant, which
will hike capacity by 50 percent to 300,000 vehicles by the end of 2005, the
company said. The Shanghai factory began round-the-clock production in August
for the first time. GM's joint venture plant with Shanghai Automotive Industry
Corp and Wuling Automotive in southwestern Guangxi Zhuang Autonomous Region is
to increase its annual capacity by 150,000 vehicles to 336,000 by 2006.
Despite soaring sales, analysts already are warning of a glut in production.
According to the China Automobile Industry Association, output of domestically
made cars will hit 4.3 million this year, while sales are forecast to reach only
1.9 million.
