General Motors Company (GM): This Auto Giant Is Setting the Bar High

Management has already decided to revive the brand by adding more models beginning with the MKZ sedan and tapping new fast-growing markets like China. Ford Motor Company (NYSE:F) has arrived in China later than GM and Volkswagen, but is on a fast growth trajectory with vehicle sales shooting up by 48% between January and May 2013.

GM’s plan

The company has decided on three things – increased production, increased dealerships, and increased lineup. GM is banking on these strategies to help it achieve its target.

As a result, it has started building a Cadillac factory in Shanghai. General Motors Company (NYSE:GM) will spend around $1.3 billion on this facility, which is scheduled to start production in two years’ time. The factory will have an annual capacity of 160,000 vehicles.

It will increase the number of Cadillac stores to over 200 by the end of this year. The company has an overall investment budget of $11 billion in China till 2016. The new dealerships will penetrate the country really deep. GM is looking to go not only to the tier-2 cities but also to tier-3 and tier-4 cities.

This year GM has introduced its XTS sedan in China. The company plans to launch a new Cadillac model every year through 2016. The designs would be keeping in mind Chinese preference for more rounded shapes. The current Cadillac models which are highly popular in the US and use inspirations from US stealth fighter aircraft are not liked in China too much.

Will GM make it?

No doubt the task ahead of General Motors Company (NYSE:GM) is uphill. But the company has done its homework well. It has some solid plans and the necessary budget to finance its bold initiatives. Once the new models hit the market, with more dealers and deeper penetration, the Cadillac brand should definitely see more demand. We can be reasonably optimistic that GM will be able to make it.

The article This Auto Giant Is Setting the Bar High originally appeared on Fool.com and is written by Eshna De.

Eshna De has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Eshna is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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