NEW YORK (Reuters) – Luxury U.S. automaker brands Cadillac and Lincoln both unveiled SUV models this week at the New York auto show to meet rising American demand, but also are keeping one eye on a growing Chinese appetite for the same vehicles, executives said.
Cadillac, General Motors Co’s (GM.N) luxury division, unveiled the XT4, a sport crossover, at the New York auto show on Tuesday.
Johan de Nysschen, who heads up the division, told Reuters on Wednesday that Cadillac is still in discussions with its Chinese joint venture partner SAIC Motor Corp (600104.SS) on rolling out the XT4 in that market, but he is optimistic that it will happen.
“The (Chinese) volume potential played an important role in ensuring the financial feasibility for the investment in this (vehicle) program,” de Nysschen said.
After the XT4, Cadillac plans a larger SUV with three rows of seats in 2019. China is the world’s largest auto market and accounts for more than half of Cadillac’s sales. And as in the United States, more consumers in China are opting for SUVs instead of sedans. But Cadillac’s de Nysschen said overall, the number of sedans should continue to grow in China.
“Our data indicate that by 2025, despite a contracting market share, the luxury sedan segment will be as big as the total Chinese luxury market today,” he said. “The (Chinese) market will almost treble over the next 10 years, so it’s massively important to Cadillac.”
GM Chief Executive Mary Barra on Wednesday told investors at a conference on the sidelines of the New York show that selling more vehicles, such as the XT4, in China should drive “a 100 percent increase in Cadillac profitability over the next four years.”
Separately, Ford Motor Co’s (F.N) Lincoln brand unveiled a three-row mid-size SUV at the auto show on Wednesday.
Consumers can buy the Aviator in a hybrid version, which Joy Falotico, head of the Lincoln division, said is aimed in part at the Chinese market with its looming government mandates for electric vehicles.
Chinese buyers “may have their parents in the back seat and they deserve the same stature as children,” Falotico said. “The fact that it’s a comfortable ride is a very important feature.”
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