Cadillac will target wealthy consumers in smaller Chinese cities to boost sales

Article by Anita Panait, on April 24, 2013

General Motors is planning for sales of its luxury Cadillac brand in China to more than triple by 2015 by targeting wealthy consumers in smaller Chinese cities. Bob Socia, GM’s China chief, remarked that GM will introduce Cadillac’s global portfolio to China and add one domestically built model a year through 2016.

GM, a member of the Detroit 3, plans to increase the number of Cadillac dealerships in China to 200 this year, from just around 70 retailers in 2011. Kevin Chen, general director of the Cadillac division at Shanghai GM, told Bloomberg News that at the moment, the tier-one cities’ market is large but is getting saturated. He noted that there is high potential for growth at tier-two and tier-three cities’ markets.

GM chief executive Dan Akerson wants Cadillac, its highly prized luxury brand, to rival BMW and Volkswagen Group’s Audi. To achieve that goal, Cadillac first needs to close the sales gap with the German luxury brands in China, where luxury vehicles sales will more than double to three million by 2020 from 2012 as forecasted by McKinsey & Co. Cadillac only sold 30,010 vehicles in China in 2012, heavily losing to Audi (405,838 vehicles), BMW (327,341 vehicles) and Mercedes-Benz (196,211 vehicles).

To better entice Chinese consumers to shift to Cadillac, GM signed up Hollywood actor Brad Pitt to help promote the brand. According to Socia, GM is aiming to sell 100,000 Cadillac units annually in China in 2015, accounting for 10 percent of the luxury market.

Socia disclosed on April 20 that most of the Cadillacs sold in China would be produced in the country to reduce costs and protect earnings from  currency fluctuation. Carmakers pay a 25 percent tariff on imported vehicles, making them less competitive against domestically produced vehicles.

When the 2013 ATS was first launched by Cadillac, the goal was to provide a challenge to many of the best premium cars in the world. Through this new compact luxury sports sedan, the brand is making its presence in the luxury car class felt with a model that utilizes a lightweight vehicle platform. Cadillac revealed that this is the newest model to showcase the brand’s very own principle of Art & Science execution.

Under this philosophy, the focus is on mass efficiency and driving dynamics. Having a curb weight not exceeding 3,400 lbs. (1,542 kg), this may well be the lightest in its class. This also means that the new ATS is the most agile to come from the brand. Cadillac’s Vice-President for Marketing said that the ATS is not just a new entry to the segment. It is a vehicle that hopes to change the status quo, given that this particular segment is dominated by European models, he continued.

He added that it is because of this that the brand decided to have a focused and extensive approach when it came to the development. By having the rear-drive, this means that the 2013 ATS will certainly excite spirited drivers as it brings a technologically driven combination of design, elegance, and performance. Despite being already considered as cutting-edge, putting in the Cadillac CUE improves the driving experience even more.

The CUE is an in-vehicle comprehensive user experience where media data and other information can be obtained via controls and commands that are considered as industry first mixed in with an intuitive design. VP Butler said that the ATS was designed to have dynamics that is truly fun-to-drive while being nimble and quick at the same time.

Further, he continued by saying that this new model is able to expand the portfolio of the brand for a significant global segment. As mentioned earlier, the brand hopes that this model will challenge the status quo. He added though that the 2013 ATS will be a vehicle that new luxury consumers will admire as it can easily fit to their particular lifestyle. Cadillac said that sales of the 2013 ATS are expected to begin by the summer of 2012.

Topics: cadillac, china

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