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GM CEO Dan Akerson Pledges Cadillac Success In China During Plant Groundbreaking

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.

Good morning.

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.

Thank you.

The GM Authority staff is comprised of columnists, interns, and other reporters who provide coverage of the latest General Motors news.

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Comments

  1. What did you expect him to say? We are going to take China like we did Europe?

    China is the largest auto market in the world and the future of nearly all companies right now lies there. If you do not have a major stake in China it will be difficult to grow and maintain a automaker.

    It is like making a pact with the devil. You have to share your technology with China automakers to be there that will hurt you later but on the other hand you may fade away if you ignore the sales of cars there.

    But the ace we have is the Chinese do not want to buy Chinese cars and it is slowing their makers down. They all want American and Euro cars not Chinese and only a few Asian cars. It is a case of having what they have always admired now that they are available there. They also have no preconceived notions about brands there like we do here and they love Buick and will treasure Cadillac there. These were images of Power and influence here and they want them there.

    It is kind of like how we think about Euro cars here to a degree and how some think they are better when in many cases it is not true.

    Reply
    1. “What did you expect him to say? We are going to take China like we did Europe?”

      Mr. Akerson’s statement is noteworthy because it’s a pledge. You do not see this every day from any automaker, GM included.

      Mr. Akerson/GM could have omitted the promise entirely, and simply said something to the effect of:

      “We expect to be successful in China.” Pledging support for success for Cadillac, which is currently non-existent for the brand in China, is significant.

      “They also have no preconceived notions about brands there like we do here and they love Buick and will treasure Cadillac there.”

      They already have preconceived notions, and some of them are not in Cadillac’s favor.

      In China specifically, a belief has developed that Cadillac is “big and heavy”, and makes a “barge” of a car. The stigma started a couple of decades ago with the “old school” Caddys, and was amplified by the Gen. 1 Art & Science design language of the 2nd-generation CTS and STS/SLS — which are perceived as being “bulkier and heavier” than the competition from Germany. Interestingly, the Chinese have a general aversion to the design of those vehicles… they’ve even coined a term for them, which translates to “big and heavy”.

      Ultimately, the success of Cadillac all over the world (including China, Europe, Oceania, and the Americas) is vital for GM. They could theoretically make do without it (as Ford does without a luxury division outside North America), but every day that Cadillac isn’t at its prime globally puts GM at a greater disadvantage.

      Reply
      1. I have read that the Chinese prefer a flowing design to one of sharp edges; I think goes with your example of “big and heavy.” I believe that Buick has continued success in China because of their flowing design, besides the fact that one of their famous Presidents also drove a Buick. Thus, I expect to see more flowing designs from Cadillac in the future; such as the softer lines of the 2013 XTS and 2014 CTS when compared to the models they replaced.

        Reply
  2. As long the car’s they build is for the Fare East Market.We need to bring the Auto production back to the USA.The SRX we own and drive every day was the last Model Built in the USA the 2008 SRX 4X4.I can say we have had very good luck with this SUV .We live in Tucson AZ. Now but came from upstate NY. The car worked very well in the snow.

    Reply

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