Restyled Cadillac CTS to aim China auto market (2)

"I think some people intuitively felt the way to sell Cadillacs there is somehow to make Cadillac have more of a Chinese aura," he told the Detroit Free Press in February. "In fact, I think we're learning the opposite, which is that they're interested in the product because it is American luxury."

With more than 200 dealerships in China, Cadillac is on pace to sell 45,000 to 50,000 cars in China this year, compared with more than 187,000 US sales, GM said. The automaker, which is vying with Germany's Volkswagen AG for the title of largest foreign automaker in China, plans to start making its smaller, entry-level ATS in China later this year. Production of the XTS at a Shanghai plant started in February.

David Zoia, editorial director of WardsAuto, an automobile information website, said GM is on the right track in its bid to win over luxury vehicle buyers in China by offering a restyled version of the CTS.

"No matter what market you're talking about, new product typically is what drives sales growth," Zoia said in an interview.

"The China market continues to grow at a relatively healthy rate, and sales of luxury models, in particular, are expanding," Zoia said. "With its new ATS and XTS models and an even more competitive CTS on the way, Cadillac appears well positioned to take advantage of that," Zoia said.

In February, GM reported an 8.1 percent rise in Cadillac sales from a year earlier, helped by surging sales of its SRX luxury utility vehicle. Those results followed a study by global management consulting firm McKinsey & Co, predicting that China's economic boom puts it on track to become the world's second-largest luxury-vehicle market by 2016 and the market leader by 2020.

McKinsey projects deliveries to China of luxury cars - defined as priced at $50,000 and up - should reach 2.25 million by 2016 in China, surging to 3 million by 2020. By comparison, luxury car sales in China totaled 675,000 in China last year, representing 5 percent of overall passenger vehicle sales.

Meanwhile, Volkswagen, GM's chief rival in China, is stepping up its assault on the Chinese market. Two weeks ago, CEO Martin Winterkorn said that over the next five years, VW would build new plants and increase production capacity in China to meet demand.

Winterkorn said VW would build "a minimum" of 10 additional plants, including seven in China. "We will be increasing our production capacity in China to more than four million vehicles a year - in line with the boom in demand there - in the period to 2018," the CEO said.

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