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 The General Motors brand is softening some hard edges on its angular
cars to appeal to Chinese buyers used to the smoother lines of
luxury cars made by BMW , Audi and Mercedes-Benz that dominate
high-end sales in the world's biggest car market.
After a slow start in China, Cadillac is poised to overtake Japan's
Lexus among the leading second-tier luxury brands, according
to consultancy LMC Automotive.
The opening in January of its first dedicated factory in China
should also help Cadillac make its cars more accessible to younger
luxury buyers by avoiding a 25 percent import tax.
Cadillac says the average age of a buyer of its cars in China is 34,
little more than half the average age in the U.S.
"In China, young buyers already dominate the luxury market. Since
Cadillac is a relative newcomer ... it was far easier to begin to
cultivate the desired positioning for the brand from the get-go,"
Cadillac President Johan de Nysschen told Reuters.
Cadillac's China sales rose 17 percent last year to nearly 80,000
cars, or a 4.1 percent share of the luxury market, on the back of
its ATS-L compact sedan and XTS large sedan. This year, de Nysschen
has set a 25 percent growth target, to above 100,000 Cadillacs in
China.
The former BMW and Infiniti executive predicts China could overtake
the United States as Cadillac's biggest market in 5-10 years.
Cadillac sold around 175,000 cars in the U.S. last year.
While shopping for a car in Beijing, 26-year-old entrepreneur Ge Di
said he preferred Cadillac over the more established German luxury
brands.
"Mercedes, BMW, even Audi, skew more towards businessmen. The
comfort level is a bit higher, but as a young person I care more
about performance and design," he said.
SECOND CHANCE
China's luxury car market - seen rising 15 percent this year even as
slower economic growth saps overall demand - is breathing new life
into brands seen as ageing or unfashionable in the United States.
Ford <F.N>, for example, considered closing down its Lincoln brand,
which with Cadillac dominated U.S. luxury sales until the 1990s, but
China has revived its fortunes. Buick, which GM had thought about
discontinuing, saw record China sales last month.
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Among the relative newcomers to China's premium market, Cadillac is
vying with Lincoln, Jaguar Land Rover, Nissan Motor's Infiniti and
Honda Motor's Acura to unsettle the dominant German brands.
De Nysschen - whose efforts to revitalize Cadillac include moving
its headquarters from Detroit to New York's SoHo - says the brand
will produce a single model design for its cars rather than making
different versions for the Chinese and U.S. markets. China will play
a larger role in driving the future direction of its global image.
For example, Cadillac will stop designing separate long wheel-base
cars for China, a mainstay of German luxury brands to appeal to
chauffeur-driven Chinese businessmen. Instead, it will have one
global "right size" design, de Nysschen said, somewhere between the
previously stretched Chinese version and the shorter U.S. version.
The shift is partly driven by younger Chinese who want to drive
themselves, he added.
"You will see a softening of some of the hard edges, and more
three-dimension styling on the side of the car," de Nysschen said,
but cars will still be "instantly recognizable as Cadillac."
Cadillac's next China-produced car, the XT5 crossover SUV, will be
aimed at a segment of the market that has defied the overall
slowdown, with sales up 50 percent last year.
"We see (Cadillac) growing significantly faster than the luxury
market overall, and we see a lot of growth opportunity in the SUV
area," GM President Dan Ammann told reporters in Beijing on Monday.
(Reporting by Jake Spring, with additional reporting by Norihiko
Shirouzu; Editing by Ian Geoghegan)
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