The C in Cadillac May Stand For China - GM to Sell and then Make(?) Cadillacs in China

DETROIT, June 11, 2003; Michael Ellis writing for Reuters reports that General Motors Corp. will export its Cadillac CTS to China within a year, and if sales are favorable the automaker could begin manufacturing the luxury sedan there, a senior GM executive said on Wednesday.

"We're going to launch the car and see how volume progresses," Fritz Henderson, president of GM Asia-Pacific, told Reuters before a presentation to reporters.

Henderson noted that German luxury automaker BMW AG will begin manufacturing cars in China later this year, and he said there has been speculation that DaimlerChrysler AG could also assemble Mercedes vehicles there.

"I wouldn't rule it out," he added when asked about local production of Cadillacs.

He said he expected initial sales for the CTS to run at an annual rate of around 1,000.

China is one of the few overseas markets where GM plans to sell a number of different brands. GM already builds Buicks and Chevrolets in China, and also plans to export Saabs there. He said there are no plans to assemble Saab vehicles in China.

GM expects sales of cars and light trucks in China to grow by more than 3 million units by 2012, the largest growth of any country in the world.

Henderson said GM will not hesitate to add capacity to keep pace with growth in China. "We will put the capacity in, hopefully well in advance of today's market," he said.

GM's market share in China slipped to 6.8 percent in the first quarter from 7.8 percent last year, due to some quality problems with the Buick Regal, Henderson said. But GM has fixed the problems with a supplier, and expects to grow its market share, he added.

The growth of China's automotive market allows the country to become a source of automotive parts for vehicles assembled back in North America, Henderson said. Some vehicles that are planned for launch in 2005 and 2006 will use some parts from China, he added.