When General Motors CEO Dan Akerson addressed attendees at the groundbreaking of a new manufacturing plant that will build Cadillac models in China for the Chinese market, the executive’s remarks were exactly what one would expect from a top-level official at such an event. But a few of Mr. Akerson’s statements in particular caught out attention, including the following (bolded highlight ours):
- “The plant we are breaking ground for today is especially important to the growth of our Cadillac brand, which competes in one of the market’s fastest-growing segments.”
- “I am here to pledge the support of the entire GM organization to ensure that we are successful.”
- “There is a proverb that says that the best time to plant a tree was 20 years ago and the second best time is now. This perfectly captures the opportunity we see for Cadillac in China.”
- “Our new plant underpins our plan to introduce a new Cadillac model in China every year through 2016 and achieve a 10 percent share of the luxury market by 2020.”
Out of all that, the takeaway seems to be that GM is serious about Cadillac’s success in China.
This is of special importance since as of this writing, the luxury brand sells very few vehicles in the country, and is significantly outsold by direct competitors such as Audi, BMW, and Mercedes-Benz. In that regard, the new Jinqiao plant will allow The General to build Cadillacs in China (for the Chinese domestic market), thereby avoiding the 25 percent tariff imposed on imported vehicles. And at the end of the day, selling more Cadillacs globally will also increase GM’s profitability — which is currently significantly lower than that of direct competitors, a circumstance that puts the automaker at a disadvantage.
The Jinqiao complex which will cost $1.3 billion; we expect it to produce the ATS and all-new 2014 CTS, among other rear-wheel-drive-based Cadillac models, in the first several years of its existence.
For a complete frame of reference, here’s is Mr. Akerson’s full speech from the groundbreaking ceremony that took place Tuesday June 18th. According to GM, the speaker’s words are definitive.
Vice Mayor Shen, Vice Mayor Zhou, Chief Jiang, Mr. Hu and Mr. Chen
It is an honor to be here today for this important milestone for General Motors in China.
We made a long-term commitment to China when we established our first facilities in Shanghai more than 15 years ago.
Today, we are renewing that commitment; honoring our relationship with SAIC and recognizing the great team here at SGM.
To succeed in China, we need to continue to grow our design, engineering, manufacturing and dealer network to meet the needs of local consumers.
The plant we are breaking ground for today is especially important to the growth of our Cadillac brand, which competes in one of the market’s fastest-growing segments.
In China and America, luxury is linked to tradition and culture: people in both countries value beauty, advanced technology and craftsmanship.
For more than 100 years, these qualities have defined Cadillac and made it synonymous with the word “luxury.”
The link has never been stronger than it is today.
Our newest vehicles like the Cadillac XTS are winning critical praise, and our sales in the United States are growing faster than they have in nearly 40 years.
We are also on the cusp of launching all-new products like the Cadillac CTS and ELR, which will rank among the most beautiful and advanced vehicles in the world.
I am here to pledge the support of the entire GM organization to ensure that we are successful.
There is a proverb that says that the best time to plant a tree was 20 years ago and the second best time is now. This perfectly captures the opportunity we see for Cadillac in China.
Starting production of the XTS in Shanghai earlier this year showed our intention to lay down deep roots for Cadillac.
The car is off to a very fast start. We’re pleased with consumers’ response to it and to the refreshed SRX, our top seller in China.
Our drive to grow Cadillac in China does not end there, as today’s event makes clear.
By 2020, the Chinese vehicle market could reach 30 million units, and we expect that more luxury cars will be sold here than anywhere else in the world – as many as 3 million.
Our new plant underpins our plan to introduce a new Cadillac model in China every year through 2016 and achieve a 10 percent share of the luxury market by 2020.
Our confidence is high because we have such a strong and experienced SGM team, great partners, fully dedicated Cadillac dealers, and the valuable support of the Shanghai government.
Together, we will achieve many more milestones in China.