General Motors upbeat on luxury vehicle sales in China
General Motors singled out the luxury segment as one of the key drivers for its future growth in China, buoyed by strong sales of Cadillac vehicles.
Mary Barra, chief executive of GM, told reporters in Shanghai on Friday that she was optimistic sales of the automaker’s premium vehicles would accelerate in coming years.
Her remarks add to evidence of increasing demand for expensive cars in the world’s largest auto market as a cycle of upgrading gets underway.
Sales of premium vehicles have outpaced the overall market in recent years as consumers view expensive cars as a status symbol and sign of professional credibility.
Nationwide sales of Cadillacs totalled 15,014 in August, a surge of 51 per cent from a year earlier.
It was also the 18th consecutive month that GM recorded double-digit sales growth in China.
GM and its joint ventures in China delivered 328,425 vehicles last month, reflecting a rise of 12 per cent on year.
Total sales of passenger cars in China grew 4.1 per cent in August on year.
Barra said that “connectivity” and “electrification” would be two areas that GM would focus on in expanding its mainland businesses, pledging to make the company’s latest technology available to Chinese drivers,
“No single company or organisation has all the answers to the challenges we currently face or expect to face in the future,” Barra said.
GM plans to launch at least 10 new-energy vehicles in China between 2016 and 2020, including the Cadillac CT6 plug-in, the Buick Velite 5 and Baojun E100.
GM expects that nearly all the vehicles it sells in China by 2025 will be electric.
SAIC-GM, the joint venture between GM and SAIC Motor, will open a new battery plant in Shanghai this year.
Beijing decided to roll back a tax incentive it introduced last year to bolster sales of smaller cars.
The sales tax for cars with engines of 1.6 litres or lower was raised to 7.5 per cent this year from 5 per cent in 2016, and will return to its standard 10 per cent in 2018.
Lincoln, the American luxury marquee owned by Ford Motor, announced in March that it would start producing a sports utility vehicle with Chongqing Changan Automobile.
Sales of SUVs have outpaced compact cars, sedans and other models on the mainland in the last few years, enticing Cadillac to design specific models for the Chinese market.
Growth in premium vehicle sales is expected to be at least double that of other segments, said Automotive Foresight’s managing director of industry research Yale Zhang.