General Motors Company
) announced that it broke ground for a $1.3 billion plant in
China that will manufacture its popular Cadillac luxury model.
With this, the automaker intends to capture the potential luxury
market in China, which is dominated by European brands. The plant
is located in Shanghai's Jinqiao zone in China.
Earlier, GM had revealed plans to roll out a locally made
Cadillac from the plant, each year through 2016. The company aims
to produce 160,000 vehicles annually from the plant.
In February, General Motors began producing Cadillac XTS sedan at
a plant in Shanghai. The Detroit-based automaker plans to expand
Cadillac's dealer network to 200 by the end of the year from 69
last year despite lagging sales as it is optimistic about the
long-term growth in the segment.
In March, GM revealed plans to build four new plants in China in
order to boost annual production capacity to 5 million vehicles
and triple its exports from Chinese plants by 2015. GM and its
joint venture partners in China plan to invest $11 billion in the
country by 2016 as part of their major expansion program.
Last year, GM built two plants in China, increasing the
production capacity by 20%. With the addition of four new plants,
the production capacity will increase further by 30% and vehicle
exports are expected to go up to 300,000 units from 100,000 units
projected for this year. Currently, the company owns 13 assembly
plants in China.
Apart from GM,
Ford Motor Co.
) has embarked upon an aggressive expansion plan in China that
includes plans to triple its lineup in China by introducing 15
models, including the Kuga small sport utility vehicle by 2015.
Currently, the company sells seven models in the country.
In order to develop the new models, Ford will build new plants
raising its capital spending to about $6 billion annually by
mid-decade from $4.3 billion in 2011. In order to keep pace with
the expansion, Ford also plans to double its workforce by hiring
1,200 employees by 2015.
Ford anticipates global sales to expand by 50% to 8 million
vehicles by 2015 given the potential growth in Asia, mainly China
and India; and rising demand for small cars. The automaker
anticipates Asia-Pacific to account for 40% of its vehicle sales
in four to five years. The company also anticipates Asian sales
volumes to double and account for a third of its global sales by
According to the China Association of Automobile Manufacturers
(CAAM), growth in total vehicle sales in China deteriorated to
9.8% in May from 13.4% in April. A total of 1.76 million vehicles
were sold during the month, leading to sales of 9 million
vehicles for the first five months of the year, up 12.6% on a
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Among the U.S. automakers, General Motors sales went up 9.4% to
252,942 vehicles in the month, driven by strong demand for Buick
cars. Ford Motor sales were impressive, soaring 45% to 70,540
units in May.
Japanese automakers continued to be the losers due to the
political conflict between Beijing and Tokyo over disputed
islands in the East China Sea. Sales of Japanese brands,
Toyota Motor Corp.
Honda Motor Co.
), fell 11.5% year-over-year in the first five months of the
year, according to Xinhua news agency.