Our man in Detroit tell us that General Motors intends to increase the number of dealerships it has across China to 4,200 from 3,800 by the end of this year. One in ten of those additional dealerships will be for Cadillac, taking the number of its dealerships to 200 from 160. Luxury marques are selling well.
Bob Socia, president of GM’s China operations, is aiming to get ahead of the growing demand for vehicles in what is now the world’s largest car market. Sales of cars and commercial vehicles are forecast to increase by 5%-8% this year, which could take the annual sales total beyond 21 million. Last year they rose 4.3% to 19.3 million vehicles even as economic growth slowed. That, though was a big improvement on 2011’s 2.5% growth in sales, hit hard by the removal of tax breaks for new-car purchases.
The biggest risk to the sales forecast for this year could be more legislation to thin traffic congestion and clean the air in big cities. Guangzhou, Beijing and Shanghai have all already done so. They may see their way to doing more on that front to, if anyone in Beijing can see anything right now. But other cities are expected to start following suit. GM’s dealership expansion could be to keep it ahead of that trend, too.