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For GM, Help Is on the Way at Cadillac

Stocks in this article: F GM TM

Karl Brauer, CEO of Total Car, recently drove the new ATS, and said that "GM has cracked the code on how to do this stuff.

"It might not quite be the 3-Series in pure driving dynamics, but we're talking shades of grey there," he said. "The difference is small enough that most people wouldn't even notice it. ATS is a hugely important car for GM, (whose) attitude is 'we're taking on the world,' and I think it's going to work."

ATS, in Brauer's view, can lead Cadillac out of the woods. The bigger XTS "is a good step in the process where they will one day have a very serious competitor" for Mercedes S-Class, he said. Escalade, a full-sized luxury SUV, "is plush enough and nice enough that people like it, but it still needs to be put onto a car platform" like the GMC Arcadia.

Meanwhile, Cadillac's CTS midsize luxury sports sedan, "is kind of a 'tweener' between BMW 3-Series and 5-Series," Brauer said. It could, in fact, be called a 4-Series. "It's successful as a tweener, but now it can evolve into something bigger because the ATS is the new 3-Series fighter," he said.

With just five vehicles once ATS arrives, Cadillac is obviously at a disadvantage in a luxury world where Mercedes has 15 vehicles, BMW has 10 and Toyota's (TM) Lexus has nine. In June, CTS and the SRX luxury crossover accounted for 77% of Cadillac's volume.

Looking ahead, Libby said "Cadillac's product renaissance" will continue with coupe and wagon versions of the ATS as well as a redesigned CTS and a redesigned Escalade. In 2014, an ATS cabriolet version and a CTS wagon both come to market, followed in 2015 by a new SRX and a redesigned CTS coupe.

Polk estimated the aggressive product introductions will drive Cadillac's share of the U.S. light vehicle market from 1.2% in the first six months of 2012 to 1.3% in 2013 and 1.4% by 2015. In 2015, BMW will have 2.4% of the market, Mercedes-Benz will have 2.1%, Lexus will have 2% and Lincoln will have 0.9%, the firm estimated.

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