GM Wins Approval for Cadillac Plant in China

The Chinese government has granted General Motors Co. permission to erect an 8 billion yuan ($1.3 billion) assembly plant in Shanghai to make Cadillac vehicles.

GM says construction of the facility, which will have annual capacity of 150,000 units, will begin next month. The company did not disclose when production would start or which models will be built there initially.

The new factory is part the $11 billion, three-year investment plan for China that GM unveiled last month. The program includes adding four assembly plants and boosting annual capacity by 30% to 5 million vehicles by 2015.

The company aims to triple Cadillac sales in China to 100,000 vehicles by 2016. Building cars locally would enable GM to sell them at lower prices than imported models, on which a 25% tariff is levied.

The company began making the Cadillac XTS large sedan—the brand’s only Chinese-made model—at a joint venture facility in Shanghai in February.

Although GM is China’s top-selling carmaker, Cadillac accounted for just over 1% of the company’s 2.84 million-vehicle volume there last year. Cadillac sales are dwarfed by those of such rivals as Volkswagen’s Audi brand (405,800 vehicles), BMW’s namesake marque (327,300 units) and Daimler’s Mercedes-Benz make (196,200 units).