General Motors Co. said Tuesday its struggling Cadillac brand
showed some life in the first quarter, riding a big gain in China
that buffered continued decline in the U.S.
The Detroit auto maker on Tuesday said its global sales grew
1.9% in the first quarter compared with the same period in 2014.
Strength in the U.S. truck and SUV market and a 9.4% gain in China
allowed GM to offset deep declines in Europe and South America.
Reviving the Cadillac luxury brand is a top priority of Chief
Executive Mary Barra. The auto maker has spent heavily in recent
years remaking the product line, but Cadillac's reputation and
breadth of offerings fall well short of German rivals.
Recently committing $12 billion in new investment to the brand,
the auto maker has installed new leadership at Cadillac and shaken
up the organizational structure.
During the first three months of the year, GM sold nearly 61,000
Cadillacs. While 2.5% higher than the same period a year ago, it is
a fraction of what German competitors sold over the period. Audi
AG, for instance, sold 438,250 vehicles in the first quarter for a
6.1% gain; luxury leader BMW AG sold 451,576 vehicles during the
period, up 5.4%.
Importantly for GM, a greater mix of Cadillac's sales are coming
from China, which is a market that GM has long been among the
biggest sellers due to demand for Buicks, Chevrolets and other
lower-end brands. The luxury division sold 19,508 vehicles in the
world's largest auto market in the first quarter, representing a 3%
increase. Caddy sales in the U.S., which has been a growth market
for the Germans, fell 6.1% to 37,175--less than half of what was
sold individually by Toyota Motor Corp.'s Lexus, Daimler AG's
Mercedes-Benz and BMW.
Cadillac Chief Johan de Nysschen has set a goal of selling
500,000 Cadillacs by 2020, and about half of the volume is expected
to come from China. Cadillac sold 263,782 vehicles in 2014,
73,500--or 27.9%--of which were delivered to Chinese buyers.
As of the first quarter, China now represents nearly one-third
of Cadillac's global volume, and Ms. Barra says the brand's
presence is poised to continue to grow. "Cadillac is growing
rapidly in China and establishing a new formula for prestige sedans
with the CT6," she said in a news release, referring to the brand's
forthcoming large sedan introduced earlier this month at auto shows
in New York and Shanghai.
China now far outpaces the U.S. as the world's largest
light-vehicle market and, as the market matures and growth slows,
GM is scrambling to enrich its sales mix. By selling more
profitable luxury cars and bigger SUVs in China, the auto maker can
soften the blow of having to compete in the fierce price war taking
place at the lower end of the market.
GM said overall sales slumped 13.6% in Europe, due to
significant declines in the Russian market and the decision to
discontinue Chevrolet in Europe last year. Its Opel brand, which is
the core division in a growing Western European market, grew 3%
over the period.
Write to John D. Stoll at john.stoll@wsj.com
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