Detroit motor show: New 'compact' Cadillac unveiled

Cadillac's new ATS model is designed to compete with German rivals

General Motors' (GM) luxury marque Cadillac kicked off this year's Detroit motor show with the unveiling of its ATS model.

GM wants the ATS to win a big part of the market for what the car industry calls compact luxury cars.

In other words, not the big limos, or the low-slung sports cars, but standard, maybe even small, family-sized cars that nonetheless have plenty of glitz, comfort and power.

"There's nothing like competing at the highest level to sharpen the best edge in people," says GM chief executive officer Dan Akerson.

The problem for GM is that that is not the sort of car that Americans have been much good at making.

The Europeans, however, have.

So much so that even though Cadillac remains a byword for luxury and style here, the US market for flash cars is one in which Cadillac was long ago overtaken by foreign rivals.

"We need to face one fact," says Don Butler, head of Cadillac marketing. "The cars that have achieved consistent success in the segment have been European cars and then more specifically, they've been German."

When it comes to compact luxury, BMW and Mercedes in particular have been cruising all over Cadillac's native highway for years now.

Audi is also gunning for substantial growth in the US and is making plans to build a factory in North America.

"It is not a question of if, but only of when," chief executive Rupert Stadler told the German newspaper Handelsblatt.

Ambition

GM 's determination to disrupt that German dominance was explicit at the ATS launch.

Mark Reuss, the president of GM North America, described the ATS as the car that "can finally challenge the German cars at their own game and win".

BMW has unveiled the latest incarnation of its 3 Series model

To illustrate that ambition, Mr Reuss and his colleagues made much of the video of the ATS being put through its paces at, of all places, the Nurburgring.

Not surprisingly, the Germans that Cadillac is chasing are in no mood to slow down.

BMW is using the Detroit show to unveil the latest version of its successful 3 Series.

Asked about the forthcoming competition from Cadillac, BMW's head of sales and marketing, Ian Robertson, says: "I always like to look forward rather than over my shoulder. BMW is the most successful premium manufacturer in the world. It is our intention to keep it that way."

Back in profit

But if they sound confident, the foreign masters of the American's luxury market know that a rejuvenated Detroit is determined to take them on.

And rejuvenation does seem to be what the "Detroit Three" are all about at the moment.

The past few years may have been bumpy, to say the least.

Two of them, General Motors and Chrysler, went bankrupt; the other, Ford, had to saddle itself with astounding levels of debt to survive.

But now all of them make a profit, and all of them make products that, in certain segments of the market at least, are successful with critics and US drivers.

Cadillac needs a mid-range best-seller to compete

Little wonder that they are now turning their attention to the bits of their domestic market they still cannot crack.

So in addition to General Motors, Ford is also preparing for bold moves in the luxury sector.

Its Lincoln brand has a grandeur maybe even more faded than Cadillac's, but it too is rolling out ritzy new wheels at this show, or at least the idea of them, with a concept version of its MKZ vehicle.

Describing the Lincoln presence at the show as a whole, Ford's director of design, Max Wolff, talks of "more than a vehicle debut - it represents the reinvention of Lincoln".

Growth predicted

For all of these carmakers, it might seem a strange time to be making a big play for the luxury car buyers of America.

After all, the country is still digging itself out of the worst economic crisis since the 1930s.

Will there really be enough drivers out there with the taste and the wallet for a fancy set of wheels?

Yes, is the confident forecast not just of General Motors and its rivals, but also of the analysts who watch the car companies' every move and crunch the numbers of their every sale.

Downstairs, in the basement of the main hall of the motor show, is where the Society of Automotive Analysts (SAA) meets, to swap predictions and share insights.

Anthony Pratt is the president of the SAA and the director of forecasting for the Polk company.

He has little doubt that the luxury segment is coming back.

"We predict that the luxury segment will be the fastest growing in the US in 2012."

Mr Pratt thinks the segment will expand by 14 % this year.

No wonder Cadillac and the other American luxury brands are so keen to grab some of that.

"Cadillac has a lot riding on this show," says Mr Pratt. "And for that matter, so does Lincoln."