General Motors Company (GM): Brad Pitt Helps Cadillac Catch On in China

Volkswagen (NASDAQOTH:VLKAY)‘s Audi brand, the favored brand of powerful government officials and Chinese bigwigs, led the market with a 29.6% share in 2012. Its German rivals BMW (NASDAQOTH:BAMXF) at 23.6% and Daimler (OTCBB:DDAIF)‘s Mercedes-Benz at 20.6% were the second- and third-place finishers. The high margins typical in the luxury-car market mean that all three are booking outsized profits from their success in the Middle Kingdom.

Cadillac has been just a bit player in China’s luxury market so far, but General Motors Company (NYSE:GM) would dearly like a piece of that action. Much of the work being done to refurbish and elevate the Cadillac brand is being done with China in mind. GM outsells VW in China, but its profits from the region trail its German rival’s by a wide margin, and the success of Audi is a big reason why. The project to turn Cadillac into a worthy competitor to the German luxury brands is an important part of GM’s strategy for closing that gap.

But patience will be required, and with the German brands already so well-established, GM is being realistic. Shanghai GM president Ye Yongming said at the XTS launch ceremony that GM expects Cadillac to sell 100,000 vehicles a year in China by 2013 and to have 10% of China’s luxury-car market by 2020, China Automotive Review reported. General Motors Company (NYSE:GM) sold about 30,000 Cadillacs in China in 2012

If GM continues its already impressive efforts to improve Cadillac’s products, that goal should be attainable. The early success of the XTS is a good sign.

The article Brad Pitt Helps Cadillac Catch On in China originally appeared on Fool.com and is written by John Rosevear.

Fool contributor John Rosevear owns shares of General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends BMW and General Motors.

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