Cadillac appeals to young Chinese car buyers
Cadillac, a favorite among America's older "supper club set," is revving up sales to younger luxury buyers in China through smoother designs and localized production to keep prices accessible.
The General Motors brand is softening some hard edges on its angular cars to appeal to Chinese buyers accustomed to the smoother lines of luxury cars made by BMW, Audi and Mercedes-Benz that dominate China's premium 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 assembly plant in China will 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, a little more than half the average age in the U.S.
"In China, young buyers already dominate the luxury market," said Cadillac President Johan de Nysschen. "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's China sales rose 17 percent last year to nearly 80,000 vehicles. The brand now claims a 4.1 percent share of the luxury market, on the strength of demand its ATS-L compact sedan and XTS large sedan. This year, de Nysschen has targeted China sales growth of 25 percent to 100,000 vehicles.
'Performance and design'
The former BMW and Infiniti executive predicts China could overtake the United States as Cadillac's biggest market in 5 to 10 years. Last year, Cadillac sold 175,267 vehicles in the United States.
While shopping for a car in Beijing, 26-year-old entrepreneur Ge Di said he prefers Cadillac over the more established German luxury brands.
"Mercedes, BMW, even Audi, skew more towards businessmen," he said. "The comfort level is a bit higher, but as a young person I care more about performance and design."
China's luxury car market -- which is expected to rise 15 percent this year even as slower economic growth saps overall demand -- is breathing new life into brands seen as aging or unfashionable in the United States.
For example, Lincoln, which with Cadillac dominated U.S. luxury sales until the 1990s, struggled for years after that. But China has revived Lincoln's fortunes. Buick, which also has struggled in the U.S. at times over the years, enjoyed record China sales last month.
Among the relative newcomers to China's premium market, Cadillac is vying with Lincoln, Jaguar Land Rover, Infiniti and Acura to challenge the dominant German brands.
De Nysschen -- whose efforts to revitalize Cadillac include moving its headquarters from Detroit to New York's trendy SoHo neighborhood -- says the brand will produce global models rather than design different versions for China and the United States.
'Right size' design
As part of Cadillac's new global strategy, China will play a larger role in influencing its global image.
For example, Cadillac will stop designing separate long-wheelbase cars for China, a mainstay of German luxury brands to appeal to chauffeur-driven Chinese businessmen.
Instead, it will offer 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 vehicle, the XT5 crossover, will be aimed at a segment of the market that has defied the overall slowdown, with sales up 50 percent last year.
GM President Dan Ammann told reporters in Beijing on Monday: "We see [Cadillac] growing significantly faster than the luxury market overall, and we see a lot of growth opportunity in the SUV area."
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 assembly plant in China will 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, a little more than half the average age in the U.S.
"In China, young buyers already dominate the luxury market," said Cadillac President Johan de Nysschen. "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's China sales rose 17 percent last year to nearly 80,000 vehicles. The brand now claims a 4.1 percent share of the luxury market, on the strength of demand its ATS-L compact sedan and XTS large sedan. This year, de Nysschen has targeted China sales growth of 25 percent to 100,000 vehicles.
'Performance and design'
The former BMW and Infiniti executive predicts China could overtake the United States as Cadillac's biggest market in 5 to 10 years. Last year, Cadillac sold 175,267 vehicles in the United States.
While shopping for a car in Beijing, 26-year-old entrepreneur Ge Di said he prefers Cadillac over the more established German luxury brands.
"Mercedes, BMW, even Audi, skew more towards businessmen," he said. "The comfort level is a bit higher, but as a young person I care more about performance and design."
China's luxury car market -- which is expected to rise 15 percent this year even as slower economic growth saps overall demand -- is breathing new life into brands seen as aging or unfashionable in the United States.
For example, Lincoln, which with Cadillac dominated U.S. luxury sales until the 1990s, struggled for years after that. But China has revived Lincoln's fortunes. Buick, which also has struggled in the U.S. at times over the years, enjoyed record China sales last month.
Among the relative newcomers to China's premium market, Cadillac is vying with Lincoln, Jaguar Land Rover, Infiniti and Acura to challenge the dominant German brands.
De Nysschen -- whose efforts to revitalize Cadillac include moving its headquarters from Detroit to New York's trendy SoHo neighborhood -- says the brand will produce global models rather than design different versions for China and the United States.
'Right size' design
As part of Cadillac's new global strategy, China will play a larger role in influencing its global image.
For example, Cadillac will stop designing separate long-wheelbase cars for China, a mainstay of German luxury brands to appeal to chauffeur-driven Chinese businessmen.
Instead, it will offer 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 vehicle, the XT5 crossover, will be aimed at a segment of the market that has defied the overall slowdown, with sales up 50 percent last year.
GM President Dan Ammann told reporters in Beijing on Monday: "We see [Cadillac] growing significantly faster than the luxury market overall, and we see a lot of growth opportunity in the SUV area."
