GM Sinks $1.3 Billion Into Chinese Cadillac Factory

Bertel Schmitt
by Bertel Schmitt
gm sinks 1 3 billion into chinese cadillac factory

GM received the hao de (O.K.) to build a Cadillac factory from China’s powerful National Development and Reform Commission (NDRC ), says Bloomberg.

GM will invest at least 8 billion yuan ($1.3 billion) into a factory located in Shanghai’s Jinqiao zone. Annual production capacity will be 150,000 units, Dayna Hart told the business wire. By making cars in China, GM avoid paying China’s import tariff of 25 percent and more, especially on bigger bore imports.

According to Bloomberg, GM’s CEO Dan Akerson “plans for the luxury brand to compete with BMW and Audi.“ It will take more than a new factory to do that.

GM sold 30,010 Cadillacs in China last year. Audi sold 405,838 units, BMW 327,341. Very unhappy with its own numbers, Daimler sold 196,211 units in China.

Cadillacs are a tough sell in China, a fact that has been conceded by Hart’s marketing colleague Susan Docherty. Dispatched from China to Europe. Docherty said that to be successful in China, Cadillac must first be successful in Europe. Good luck with that. Cadillac sales in Europe are so low that they rarely register in official statistics.

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    • Thelaine Thelaine on May 10, 2013

      @VA Terrapin You are living in a self-righteous terrarium of your own making.

  • Stroker49 Stroker49 on May 07, 2013

    30000 Cadillacs, that is less than Volvo who failed last year at 40 grand in China! If GM wants to succed here in Europe they must do something spectacular. Owning a Cadillac here is at least as expensive as driving a BMW or Mercedes. Then Cadillac must be at least as good and have good service and support. GM charged me 4800 usd for a LHS Xenon headlamp unit, that unit is 700 usd in the USA.When I complained their service organisation answered me that it might be wiser to buy a Lexus or BMW if I live here in Europe. As I like America and American cars I can take some hassle to drive something odd. Most Europeans would NOT.

    • Bd2 Bd2 on May 08, 2013

      Keep in mind that the Germans have the advantage of local production and thus avoid the hefty 25% auto import tariff.

  • Blowfish Blowfish on May 07, 2013

    not sure to invest 1.3B and what kind of return projection? they should have some feasibility studies done, but how accurate is it going to be? sometimes when the car is being built locally it kind of lost its allure of being an import and the image can go down hill from there, unless the car is very entrenched in the culture. Look at what VW did to wabbits during the early 80s, plus all those cars made here were all shaking as much as late great Elvis.

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    • Sunridge place Sunridge place on May 07, 2013

      @sunridge place You would be correct...bad quick bad. Not sure if there's anything else going on above that 25% because the SRX starts at about $70k in China. I think there's an additional tariff on imported engines above a certain displacement but I could be wrong. Or, perhaps they only export the high end models from NA to China.

  • Icemilkcoffee Icemilkcoffee on May 07, 2013

    Susan Docherty is a moron. Buicck has no presence in Europe, yet is very successful in China. hat is true for America is not necessarily true for China.She needs to b fired ASAP and replaced with somebody who ctually familiar with the conditions on the ground in China.