Shanghai GM is to introduce a premium Saab sedan in China, expanding its presence in the lucrative luxury car market.

 

While still planning to manufacture a premium Cadillac in China in November, Shanghai GM signed an agreement with Saab Automobile AB, a subsidiary of General Motors, on July 6, obtaining the rights to import and sell a mid-range model from specialist Swedish carmaker Saab.

 

The model to be introduced to the mainland market, the Saab 95, is billed as a rival to the ever-popular BMW 3 series cars and Mercedes' smaller sport sedans.

 

Industry analysts anticipate Shanghai GM, a leader in the family car and middle-class sedan markets, will advance further in the luxury car market, which is currently mainly dominated by German firms.

 

Ding Lei, Shanghai GM general manager, told China Daily yesterday that the launch of the Saab 95 was a milestone for Saab's future development in China.

 

Adverts for the car have already begun to appear on TV and in printed media.

 

"Saab plays a key role in GM's premium brands and will help Shanghai GM extend its presence in the lucrative luxury car market.

 

"Our cooperation with Saab is not limited to sales. Saab's brand influence and its experience in the luxury car market will advance Shanghai GM's push into the high-class auto market," said Ding.

 

Shanghai GM is planning to build up to 20 Saab dealerships in China's major cities including Shanghai, Beijing and Guangzhou by the end of the year, said Chen Yanming, a spokesman for Shanghai GM.

 

A Shanghai GM statement yesterday said the Saab 95, including a bio-powered version, will be Shanghai GM's mainstream model, along with the Cadillac, in the luxury auto market.

 

It also said Saab's target customers will be the new rich with a loyalty to brands and an increasing and unique appetite for the high-quality life.

 

The fever for luxury products in China saw more than 50,000 high-class sedans imported in the first quarter of the year.

 

Luxury car makers including BMW and Mercedes-Benz have begun to build cars in China to lower prices.

 

Shanghai GM started selling Cadillacs in 2004, to compete with BMW, Mercedes-Benz and Audi in the luxury car market.

 

Jan-Ake Jonson, managing director of Saab Automobile AB, told China Daily yesterday at the Saab 95 launch ceremony in Shanghai that he believes Saab can compete with any luxury car available in China.

 

"In Europe, our global sales have increased by 11 percent from last year," said Jan-Ake. "I believe Saab will provoke whistles of surprise in China."

 

Jan-Ake said Saab will be not be made in China in the coming years.

 

Saab sold 70,864 cars globally last year. Even in the cooling European market, Saab achieved a 10 percent growth in market share last year, said Kevin Snell, the company's China development manager.

 

Zhong Hui, an analyst from Shanghai Jiuhua Auto, a leading local dealership, said luxury cars such as Saabs are popular although it may take some time for customers to develop loyalty to a new brand.

 

"As living standards improve, they become more selective in purchasing cars, especially luxury cars," said Zhang. "They do not only want BMWs and Benzs, but also cool cars like Saabs."

 

(China Daily July 12, 2006)