General Motors' Cadillac luxury division is looking to expand significantly its sales in China and Europe during the next several years as part of a broader strategy to rebuild Cadillac as a global name able to compete directly with BMW or Mercedes-Benz, Dow Jones reported.

According to the report, Cadillac general manager Mark LaNeve said during the Automotive News World Congress conference that Cadillac hopes to sell about 10,000 vehicles a year in Europe by the end of the decade, adding that Cadillac is working to develop diesel-powered models for that market.

"If we are to be a serious competitor, we have to have diesels" in Europe, he reportedly said.

LaNeve Cadillac hopes to offer a full line of models in China, where luxury vehicle sales are booming, Dow Jones said. He reportedly noted that GM China and Cadillac are still discussing which Cadillac vehicles will be assembled in China and which shipped from the US.

LaNeve also reportedly said Cadillac expects some growth in the US market in 2004 over 2003's result of about 216,000 cars and sport-utility vehicles but added that the brand won't try to expand sales volumes by offering models priced under $US30,000, as rivals BMW and Mercedes-Benz either plan to do or already have done.

According to Dow Jones, LaNeve said Cadillac's future success should be measured by several factors, including share of sales of vehicles priced above $50,000.

"We hope we grow this year," he reportedly said in a sideline discussion with reporters, but doesn't expect Cadillac sales to show the same pace of growth as in the past two years - Cadillac expanded US sales by about 8% in 2003 compared to 2002.

Dow Jones noted that the brand isn't getting a major new model until late this year, when the STS - a replacement for the current Seville - is due to begin production.

According to the report, LaNeve admitted Cadillac "had a couple of missteps on the marketing" of the new SRX crossover SUV, launched last fall amid high hopes and strong reviews from automotive publications.

Dow Jones said istocks of the SRX have built up to a hefty 115 days supply at the end of December and Cadillac is offering $2,000 to $3,000 in payments to dealers to help sell V8 powered models that have been slow movers and, earlier this week, announced a $1,500 discount available for dealers to entice customers into an SRX from rival models.

The SRX launched with mostly V8 models, priced above $50,000, but LaNeve reportedly said customers wanted less-expensive V6 models. He told the news agency that Cadillac expected higher demand for the V8, but instead found that 70% to 75% wanted V6s - a mix similar to sales of BMW's rival X5 crossover wagon in the US [the diesel dominates in Europe].

LaNeve said Cadillac is exploring developing a vehicle with a more fuel-efficient petrol-electric hybrid powertrain, Dow Jones added.