Despite record sales of vehicles in China, General Motors has posted a 14% drop in first-quarter profits, faced with one-off costs and weaker earnings in its core North American market. Detroit-based GM had 15.2% of the Chinese market during the January-March quarter, and expects to invest at least USD11 billion in China between 2013 and 2016, adding four assembly plants and raising capacity by 30% to 5 million vehicles. It will boost capacity in the country 20% this year from a year ago. Margins at GM’s Chinese joint ventures were 11.7%, up from 10.2% in last year’s first quarter, compared to margins of about 4% in the U.S. GM has 12 joint ventures and two wholly-owned enterprises in China. As sales of luxury sedan and sport-utility vehicles (SUVs) in wealthy Chinese coastal cities slow, foreign automakers are turning their attention to western China. GM and its Chinese joint venture partners plan to open a USD1 billion factory in Chongqing in 2015 that will produce 400,000 cars a year. GM sold a record 816,373 vehicles in China in the last quarter, a 10% jump from a year ago. As part of its effort to win over Chinese luxury-vehicle buyers who favor German brands BMW, Audi and Mercedes- Benz, the U.S. company in February put its XTS Cadillac sedan on sale in China. GM China President Bob Ferguson has said he expects Cadillac sales in China to triple to 100,000 by 2015. Profits in GM’s international operations, including China, fell 5% to USD495 million, and gains in China helped offset weakness in other regions, including India, GM said.

Chinese  authorities have approved a USD1.3 billion General Motors plant to make luxury Cadillac cars. Construction of the plant, which will have an annual capacity of 150,000 vehicles, will start in June in Shanghai. It will be run by Shanghai GM, the joint venture of GM with China’s SAIC Motor. The company plans to unveil one new Cadillac model a year through 2016 to boost annual sales of the marque from 30,000 vehicles last year to 100,000 by 2015.