BEIJING (Bloomberg) -- General Motors Co., the biggest overseas automaker in China, will concentrate on luxury sales in the nation in the next three to five years as increasing wealth drives demand for premium vehicles.
GM plans to expand its Cadillac range to compete for affluent consumers currently buying BMW and Audi cars, according to Kevin Wale, the carmaker's China president.
The automaker is targeting to increase production capacity in the country by as much as 40 percent in the next two years, he said in Shanghai today.
"Luxury-car sales will continue to grow faster than the overall passenger-car market, driven by increasing wealth," Wale said in a Bloomberg Television interview.
The segment is "a key area of focus for us over the next three to five years," he said.
Audi is the top-selling luxury brand in China, followed by BMW and Mercedes-Benz.
Cadillac sold 23,106 vehicles in China in the first 11 months of 2011, up 51 percent, according to LMC Automotive, well behind the leaders.
GM is pushing to sell more premium cars to meet the next wave of luxury demand from an emerging class of successful entrepreneurs in China, Wale said.
The country may overtake Germany as the world's second-largest market for luxury vehicles this year, trailing only the United States, according to research firm LMC Automotive.
Overall auto sales in China may rise by 7 percent to 10 percent next year, with demand for trucks and mini-commercial vehicles rebounding from a probable decline this year to expand 5 percent in 2012, Wale said.
China's car market "remains fairly resilient," he said.
Industrywide passenger-car sales rose at the slowest pace in six months in November, gaining 0.3 percent to 1.34 million units, according to the China Association of Automobile Manufacturers.
Annual deliveries are poised for the smallest gain in 13 years, the industry group estimated.
For the first 11 months of 2011, GM's deliveries increased 8.2 percent to 2.35 million in the world's largest automobile market.
The carmaker, poised to regain its lead in the global automotive industry from Toyota Motors Corp., has said it plans to expand its luxury car and sport-utility vehicle lineup to double deliveries in China to 5 million by 2015.
GM plans to increase the local production of Cadillacs as well as import more models, Wale said, without providing more details.
China's decision to increase import levies on some vehicles from the U.S. will have minimal impact as imports account for 0.5 percent of GM's China sales, he said.