2013 Cadillac ATS
General Motors

In an effort to grab a share of China’s ballooning luxury car market, which is dominated by German car makers, General Motors Co. (NYSE:GM) will begin constructing a $1.3 billion Cadillac factory in Shanghai soon.

The ground will break on the project in June. When completed, the facility will churn out up to 150,000 of the company’s premier brand autos a year, according to a GM statement on Tuesday that announced that Chinese authorities had approved the plan.

The facility will be operated by Shanghai GM, a joint venture with China's largest auto maker, SAIC Motor Corp. Ltd. (600104.SH).

North America’s largest car company is trying to turn Cadillac, established in 1902 and named after the founder of Detroit, into a major global luxury brand. While it currently sells in 37 countries, the Cadillac has never achieved the global status enjoyed by the likes of Mercedes-Benz and BMW. Audi is currently the most popular luxury brand in China.

But earlier this year, GM launched the XTS sedan in China, and the company has said it would release a new Cadillac model every year through 2016. The company is aiming for 10 percent of the global market share of the luxury car market by 2020.

Chinese consumers bought 1.25 million luxury cars -- generally viewed as cars priced from about $30,000 for entry-level compacts to well over $100,000 at the other end -- last year, according to McKinsey & Co., which estimated that this segment of the Chinese auto market could rise to 3 million units a year by 2020.