General Motors which, through its local joint ventures, is the largest foreign automaker in China, announced it had won regulatory approval to build a new Cadillac factory to boost local sales.
According to Bloomberg News, the National Development and Reform Commission approved the plant which will be located in Shanghai’s Jinqiao zone, with construction beginning in June.
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GM spokeswoman Dayna Hart told the news agency the investment would be at least CNY8bn (US$1.3bn) for annual production capacity of 150,000 units.
Local production would mean GM avoids paying China’s 25% import tariff as it seeks to boost Cadillac sales in China.
Last February, the GM-Shanghai Automotive JV started assembling the XTS in Shanghai at an existing plant.
Bloomberg noted that building in China is part of CEO Dan Akerson’s plans for Cadillac to compete with BMW and Audi.
Both have well-established local manufacturing operations which make models including unique-to-China versions of BMW’s 3 and 5 Series and Audi’s A6.
GM sold 30,010 Cadillacs in China last year, trailing Audi (405,838), BMW (327,341) and Mercedes-Benz (196,211), according to Bloomberg. Production of the Cadillac SLS in China was replaced by the XTS, Hart said.
