Cadillac, like many brands, has a whole different image in China than 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. In Beijing and China’s other major cities you don’t see seniors behind the wheels of BMWs or Land Rovers. Luxury car buyers, at least those of brands not associated with the government or retirement—such as Audi and Mercedes-Benz—are young and hip. General Motors’ Cadillac is near the top of that list.
Cadillac recently opened a $1.2 billion factory in China where it will produce cars for the local marker to avoid the 25% duty on imported cars, which is expected to help entice a younger demographic with smaller sticker prices. Last year Cadillac sold 80,000 cars in China compared to about 175,000 in the U.S.. This year the goal in China is 100,000.
GM and Cadillac have some advantages in the country. GM opened business early in China, in the mid-1990s, and just a few years later began producing a domestic car, the Buick Century, and signing a dozen joint ventures. GM’s brands have been around for a while in China.
GM also doesn’t carry the stench of a bankruptcy or decades of press scrutiny for mismanagement and lack of innovations like it does in the U.S., highlighted in a Fortune 1983 cover story. Cadillac in China is free from GM’s burdens elsewhere.
Cadillac is hoping its next hit is the China-produced crossover XT5, Reuters said, which may tap into the country’s booming demand for SUVs. Audi and even Lamborghini have also zeroed in on the booming Chinese market for SUVs growing at nearly 50% a year. And the demographic showing the fastest growth in demand for SUVs? Young families.
Cadillac might yet keep its fresh image in the world’s biggest market for new cars.