- The Washington Times - Tuesday, November 4, 2003

SHANGHAI (AP) — It’s time for the communist cadres’ Red Flag limos to pull over. Cadillacs are on the way.

General Motors Corp. said yesterday it plans to boost its manufacturing capacity in Shanghai by 50 percent to build Cadillacs, expanding its push into the luxury end of the world’s fastest-growing auto market.

GM, which already markets Buicks and Chevrolets here, said it would sell both imported and domestically assembled Cadillacs. To meet rising demand, it plans to expand production capacity at its factories in Shanghai and in southern China.

Producing Cadillacs inside China would allow customers to avoid high import duties.

“We are excited about expanding our presence in China in order to keep up with the rising demand for vehicles, especially passenger cars,” said Rick Wagoner, GM’s chairman and chief executive officer.

GM did not provide details on its plans for the Cadillac, including which of the eight models it will sell here, how much they will cost or how many the company expects to sell.

The chunky Red Flag limousines that once swept Communist Party functionaries through empty boulevards have given way to a wide array of autos, from tiny Suzuki Altos to luxury models.

The fuel-hungry Cadillac, with its sleek but capacious lines, has long been a trapping of American affluence. It would stand out even more dramatically on the pothole-pocked streets of China’s chaotic cities, giving members of the new moneyed class another way to flaunt their wealth.

Competition for China’s fast-expanding market has been heating up, with GM, Ford, Honda, Nissan, Toyota, BMW and DaimlerChrysler all recently announcing plans to expand capacity to keep up with explosive demand.

Vehicle sales in China soared 30 percent in the first nine months of this year.

GM, which claims an 8.2 percent share of China’s vehicle market, says its sales by late September already had surpassed the total for last year, with 267,395 cars sold.

The world’s biggest carmaker started with Buicks at the Shanghai plant in 1998 and invested more than $2 billion in the country through a number of joint ventures, which now make domestic brands as well as Buicks and Chevrolets.

Cadillacs will be assembled alongside Buicks at GM’s Shanghai plant, which will increase capacity by 50 percent to 300,000 vehicles by the end of 2005, the company said. The Shanghai factory began round-the-clock production in August.

GM’s joint-venture plant with Shanghai Automotive Industry Corp. and Wuling Automotive in southwestern China’s Guangxi region is to increase its annual capacity by 150,000 vehicles to 336,000 by 2006.

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