US auto giant General Motors (GM) has announced massive investments in China to wrest the grip of German carmakers BMW and Audi on the country's luxury car market. GM hopes to boost sales 5 times by 2020.
The world's biggest carmaker General Motors (GM) announced Wednesday that it would invest $11 billion (8.2 billion euros) in four new plants in China, specifically to boost sales in the luxury car market.
"We're going to bring our high-end premium product here and we're going to see how we run against competitors from Europe and Japan," said GM Chief Executive Dan Akerson after breaking ground on a new Cadillac factory in Shanghai, China.
GM is already the largest foreign auto maker by sales in China. But the luxury market is dominated by German companies such as BMW, Mercedes and Audi, which hold an estimated 80 percent share.
The new GM Cadillac plant in Shanghai is intended to have an annual output of 160,000 vehicles after it becomes fully operational in two years time. GM said it was planning to introduce one new Cadillac model a year to boost sales of its premium brand from currently 30,000 to more than 100,000 by 2015.
Sales of luxury goods in China have declined as the country's Communist rulers have moved to curb government extravagance in view of public protests. Nevertheless, GM CEO Akerson forecast that China would eventually become the world's largest luxury car market with sales of 3 million vehicles annually.
The other three GM plants which the US auto maker plans to build in China include a factory for mini-commercial vehicles in Chongqing city and facilities in Wuhan and Shenyang, for which specific models have not yet been assigned.
In addition, the number of Cadillac dealerships will rise to 200 by the end of the year from 69 now.
uhe/rc (AFP, AP)