In China, chauffeurs drive a Cadillac

Melissa Lee Reporter • Profile

SHANGHAI - China is car crazy. On the streets of Beijing, bikes are being replaced with autos, and with the growing wealth, one all-American brand is finding a new identity and new customers.

Here's a staggering stat: Ten years ago, one in 1000 Chinese owned a car; now that's up dramatically to one in 20.

For the new rich, it's luxury vehicles they're buying. But along with Mercedes and BMW, Cadillac is finding a niche, especially among younger males who want to drive a symbol of American success.

“Caddies are expensive. The cost of a fully-loaded SLS, Caddy's top seller in China -- $780,000 RMB, the average household income of customers -- about a third of that,” said Karen Rafferty, Cadillac China’s brand director.

Even so, customers pay cash for their cars. About 70 percent of the customers in that Shanghai dealership paid for their vehicles upfront, usually using a credit card.

It's Saturday in Shanghai, and the cars are pulling back into the lot at one of the newest Cadillac dealerships in China. Test drivers-- virtually 100 percent of those invited to attend – are all potential customers in one of Cadillac's fastest growing markets in the world.

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Dealer Gong Bing-chao says he likes what he's seeing in China.

“The newly rich have made luxury goods popular in China. As income goes up, China has become a much bigger market for luxury products. Cadillac will take advantage of that trend and grow the business,” he said.

In fact, Cadillac China is posting a 120 percent increase in unit sales so far this year, versus an 11 percent slide in the U.S.

So what's breathing new life into the old brand: A new breed of customers.

In china, it's not your daddy's or granddaddy's car. The typical customer is male, 35 to 50. One of the biggest selling points: It's all-American.

Li Ning is 35 years old and works in money management. He bought his Escalade in March and likes what the car says about him.

“Yes, the car's a symbol of success,” he said.

For the Chinese consumer, it's more than just about buying a car; it's about buying into the luxury lifestyle. At every dealership here in China, there's a Cadillac café which serves foreign wines and even, sometimes, cigars.

Part of that lifestyle: a chauffeur. 60 to 70 percent of China's Cadillac owners do not drive the cars themselves; they sit in the backseat. To adjust to the new found customers, Caddy's best selling model, the SLS made here in Shanghai is four inches longer in the back.

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“You can control the radio, the HVAC, even the DVD you can control from the back seat,” Rafferty said.

Still, it's a tough battle for the upstart. Cadillac's been in China just 3 years, and competition from European luxury stalwarts Mercedes, BMW and Audi is fierce.

The all-American appeal, though, is driving rapid growth.

“The Cadillac brand just keeps growing in China. We're seeing new dealerships, opening new dealerships every month. So our growth and our availability as well as volume has certainly been outstanding,” said Rafferty.

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