Global au­tomak­ers tar­get lux­ury seg­ment in China

US brands launch new prod­ucts to com­pete against Europe, Ja­pan peers

China Daily (Canada) - - BUSINESS - By AGENCE FRANCE-PRESSE

China is the new El Do­rado for US au­tomak­ers look­ing to de­velop sales of their lux­ury brands, which glob­ally are lag­ging be­hind Ger­man and Ja­panese com­peti­tors.

Gen­eral Mo­tors, the largest US au­tomaker, al­ready sells more­cars in­China each­month than it does in its home mar­ket and ex­pects that to con­tinue.

“Our joint ven­tures in China are work­ing to boost pro­duc­tion ca­pac­ity by 30 per­cent to more than five mil­lion units an­nu­ally by 2015,” GM Chief Ex­ec­u­tive Of­fi­cer Mary Barra told the firm’s an­nual share­hold­ers meet­ing.

GM launched lux­ury a Chi­ne­se­pro­duced sedan, the XTS, last year and is steadily adding more ve­hi­cles to its Cadil­lac range.

“Cadil­lac is al­ready a very prof­itable business for us and GM ex­pects to see sub­stan­tial growth for its lux­ury brand over the next fewyears, par­tic­u­larly in China where young con­sumers are open to new brands,” said Dan Am­mann, pres­i­dent of GM.

The US firm a few months ago poached Jo­han De Nyss­chen, the for­mer ex­ec­u­tive of Nis­san’s lux­ury Audi and In­finiti brands, to head the Cadil­lac brand.

The name­plate, part of GM since 1909, traces its roots to theFrench founder ofDetroit -to­day the heart of the US auto in­dus­try -- An­toine Laumet de LaMothe, Sieur de Cadil­lac.

China will­be­comea “vol­ume hub” for the Cadil­lac brands, DeNyss­chen said re­cently.

China, the world’s largest auto mar­ket, ac­counts for about 25 per­cent of global lux­ury car sales and its share is only grow­ing. Ger­man au­tomak­ers in­clud­ing Audi, BMW, Mercedes and Volk­swa­gen hold about 80 per­cent of the “pre­mium” mar­ket.

Cadil­lac will soon launch in China a new full-sized sedan for own­ers who use a chauf­feur and a smaller sports util­ity ve­hi­cle, bur­nish­ing the brand’s rep­u­ta­tion for build­ing dis­tinc­tive ve­hi­cles, he said.

“China has in­deed been a very re­ward­ing mar­ket for GM. We’ve ben­e­fited from tremen­dous growth. China has taken a very big role in GM and China’s voice is a very strong voice within GM,” GM China Pres­i­dent Matt Tsien said dur­ing a re­cent con­fer­ence in Wuhan. GM cre­ated the post in Jan­uary to co­or­di­nate the US company’s grow­ing op­er­a­tions in China.

Gen­eral Mo­tors is not the only US company look­ing at lur­ing the Chi­nese high-end buy­ers. Ford Mo­tor Company has just launched its Lin­coln name­plate there.

The Dear­born, Michi­gan­based Ford, the No 2 US au­tomaker, hopes to sell more than a mil­lion cars in­China this year for the first time and is bank­ing on the ap­peal of a reimag­ined Lin­coln.

The best-sell­ing lux­ury brand in theUnited States two decades ago, Lin­coln has been lag­ging be­hind lux­ury Ger­man and Ja­panese sedans.

In Oc­to­ber Ford launched its first ve­hi­cles un­der the Lin­coln brand in­China, es­pe­cially de­signed for the mar­ket: a mid-sized sedan, the MKZ, and a com­pact SUV, theMKC.

In early Novem­ber, Lin­coln opened its first deal­er­ships in Beijing, Shang­hai and Hangzhou.

Kumar Gal­ho­tra,

pres­i­dent of Lin­coln, said a to­tal of eight Lin­coln stores will open in Chin­aby theendof the yearandby 2016, 60 Lin­coln stores will be open in 50 ci­ties na­tion­wide, un­der a mar­ket­ing pro­gram called “The Lin­col­nWay”.

“The Lin­coln Way demon­strates how a sto­ried brand with a nearly 100-year his­tory is in­no­vat­ing for Chi­nese cus­tomers while stay­ing true to its roots of per­sonal ser­vice,” Gal­ho­tra said.

Cre­ated in 1917 by for­mer Cadil­lac ex­ec­u­tives, Lin­coln is named after Abra­ham Lin­coln, the 16th pres­i­dent of the United States. Ford has owned the brand since 1922.

The first US au­tomaker to launch it­self in the Chi­nese mar­ket, in the 1980s, is Chrysler, which to­day is part of Ital­ian group Fiat Chrysler Au­to­mo­biles based in­Mi­lan.

But it was a bumpy road for Chrysler, which had teamed up with Ger­many’s Daim­ler AG, maker ofMercedes-Benz.

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