General Motors Co. expects demand for luxury vehicles in China to grow slower than the overall auto market this 2013. GM expects the Chinese vehicle market to grow by 7-8 percent this year. Bob Socia, GM's China chief, said they expect premium car sales in the country to increase by around 4 percent this year, which is just half the growth the carmaker expected at the start of 2013 Demand for luxury items like sports cars and Swiss watches has declined in China after President Xi Jinping ordered Chinese officials to trim down on lavish spending and stepped up probes into graft.
Premium car sales in China are slowing down at a time when sales in Europe are diving to a 20-year low.
Han Weiqi, an auto analyst with CSC International Holdings Ltd., told Bloomberg that demand for luxury cars in China could still reach 10 percent despite a crackdown on corruption, calls for thriftiness and slower economic growth. He remarked that GM’s forecast for a 4-percent growth means the carmaker expects “the segment will be pretty sluggish."
The carmaker is planning to more than triple Cadillac sales by 2015 in China to 100,000 units by launching a new model every year until 2016. GM chief executive Dan Akerson, who was in Shanghai to grace the groundbreaking of a new Cadillac assembly site in the area, said the luxury brand is a priority in its plan to invest $11 billion in China through 2016. GM plans to hold a 10-percent share of the Chinese luxury market by 2020. [source: Bloomberg]