GM to launch second Cadillac model in China

SHANGHAI, Feb 28, 2005; Reuters reported that General Motors, will begin selling an SUV model from its Cadillac line in China from Tuesday, after introducing the iconic brand to its second-largest market worldwide in 2004. General Motors Corp. said it had sold more than 1,000 Cadillacs in China since sales began last October and a company executive told Reuters last year the company expected to sell several thousand in the country in 2005.

The entry of the Cadillac pitted GM head-to-head against more established high-end models by Volkswagen AG's (VOWG.DE: Quote, Profile, Research) Audi AG (NSUG.DE: Quote, Profile, Research) and BMW AG (BMWG.DE: Quote, Profile, Research) in the world's third-largest vehicle market.

The Detroit giant, second to Germany's Volkswagen in China sales, launched the Cadillac to flesh out its product slate -- from the cheap Spark minicar to luxury models -- as it accelerates a drive to grab market share in China.

GM will offer an imported version of the SRX sport utility vehicle (SUV) for 688,000 yuan ($83,130) and a version made by its Shanghai joint venture for 759,000 yuan -- more than double the base retail price in the United States.

It can cost up to 20 percent more to produce a vehicle in China due to inadequate logistics and higher import tariffs, analysts say.

GM said in a statement it would start taking orders on Tuesday for the SRX, which complements the Cadillac CTS sedan it launched in China last year.

Analysts estimate the luxury sector takes up 5 percent of China's market, versus more than a tenth in the United States.

The mainland SUV market is dominated by local players such as Great Wall Automobile Holding Co. Ltd. (2333.HK: Quote, Profile, Research) and established foreign companies such as Mitsubishi Motors Corp