GM goes local to raise market share

US automaker General Motors Co aims to increase its market share in China's expanding luxury vehicle segment through local production of its high-end Cadillac cars.

Shanghai GM, a 50-50 joint venture between General Motors and its Chinese partner SAIC Group, broke ground on Wednesday for a new plant to make Cadillacs in Shanghai. The base will include a research and development facility under its Pan-Asia Technical Automotive Center (PATAC).

The total investment for the new plant, with a planned annual capacity of 160,000 luxury vehicles, and the R&D facility stands at 8 billion yuan ($1.3 billion).

"Shanghai GM's new plant and PATAC's new facility will support the full implementation of our luxury car strategy while allowing us to address competitive challenges well into the future," said Ye Yongming, president of Shanghai GM.

"Our focus is on luxury vehicles and SUVs going forward," said Bob Socia, president of General Motors China. "Not long ago, both were considered niche segments. Both are now mainstream and growing rapidly."

Socia said GM is in the process of bringing Cadillac's entire global portfolio to China, adding one locally produced model per year through 2016.

Earlier this year, it introduced the locally produced XTS luxury sedan as well as the updated SRX luxury sport utility vehicle, which is Cadillac's best-selling model in China.

GM has set a goal for its Cadillac brand of tripling annual sales in China to 100,000 units by 2015 and achieving a share of China's luxury car market of 10 percent by 2020.

Cadillac sales in China were up slightly in 2012 from the previous year to a record 30,010 units. The luxury brand was led by the SRX, which sold 21,698 units, up 8.9 percent.

In May, Cadillac sales were up 74.3 percent on an annual basis to 3,843 units, the brand's second-highest monthly sales in China.