Chairman and CEO of General Motors Dan Akerson recently spent some time in Shanghai to assure GM’s desire to stay in China for the long haul. Since GM is currently an industry leader in China, it makes perfect sense to even further grow its current market share in the region. And as China’s economy (and middle class) grows, the need for luxury cars is ever important. With that in mind, Cadillac aims to become a larger player in the Chinese market.
To help feed the monster that is China’s economy, GM has decided that building a Cadillac plant in Shanghai will assist in doing so. When the plant is finished in 2015, it will include a body shop, paint shop, general assembly shop, auxiliary facilities, and high-speed and brand experience center, on top of being one of the “greener” operations around. It will be capable of churning out 160,000 Cadillacs yearly, which will help GM triple its current luxury sales to 100,000 units.
There will be one new Cadillac model added per year through 2016, starting in 2013 with the XTS sedan. This plan will be implemented to help strengthen long-term success of GM Asia as a whole.
In addition to the new Caddy plant, the Pan Asia Technical Automotive Center (PATAC) began early construction of a new R&D facility on June 19.
The two facilities, which are 50-50 joint ventures between General Motors and SAIC, have a combined investment of RMB 8 billion (US$1.3 billion).
GM’s SAIC-GM-Wuling joint venture also began construction Tuesday on a Wuling production base in Chongqing, in southwest China, with total investment being $6.6 billion. The first phase is scheduled for completion in 2014. It will have a planned production rate of 400,000 cars annually.
“GM made a long-term commitment to China when we established our roots here more than 15 years ago. That commitment is exemplified by the growth of our operations in Shanghai as well as in the central and western regions,” says Akerson. “By working with our partners and joint ventures, we are creating new opportunities for our customers and China’s automotive industry.”
During meetings with Shanghai Party Secretary Han Zheng and Mayor Yang Xiong, Akerson discussed the company’s plans for expansion in the city. This is all part of $11 billion USD in capital spending in China by GM’s different joint ventures through 2016.
“We appreciate the government’s continued support of our growing operations,” says Akerson. “GM intends to continue investing and adding to its operations in this key market, as demonstrated by the new facilities we begin constructing this week.”
In addition, “Our joint ventures have been and will remain our foundation in China. Increasing our ability to design and manufacture vehicles locally will strengthen our position in the world’s largest vehicle market and GM’s largest market,” mentioned Akerson.
To sum things up, GM will be invensting some serious time, money, and effort into the Chinese market, and we think it’ll pay off down the road.