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Can Caddy Finally Beat BMW?

Source: cadillac.com

As new model announcements go, this may be the most intriguing one we'll hear about this year.

Cadillac, long a non-factor in small luxury cars, is rolling out a C-segment model next year.

Right now it's called the ATS, but by the time it hits showrooms that could change.

The name is not important. What matters is that the ATS finally gives Cadillac a model that can compete with the BMW 3 series and Mercedes C-Class in the small luxury car market.

For years, Caddy has either ignored or made woeful attempts to be successful in the small luxury car market. Remember the Cadillac Cimarron in the '80's? Yeah, you get the idea. Caddy has never done small well.

Meanwhile, the entry level luxury market has boomed and become a huge market for BMW, Mercedes and Lexus. It's also helped all three bring in new buyers who they've kept in their respective families and eventually moved up to larger luxury models. In fact, when you look at the growth in luxury cars in the last decade, much of it has been fueled by smaller, well appointed, and well equipped cars. In other words, drivers cars.

Will the ATS pick-off some business from the C-Class and 3 series? At least a little, that's inevitable. But whether or not the ATS can win over buyers who would otherwise buy a BMW or Mercedes remains to be seen. Yes, Cadillac is more competitive with all the luxury brands, but in the 3 series and C-Class it faces two well established models that are still on their game. In other words, BMW and Mercedes are still giving buyers everything buyers want in a small luxury car.

Welcome to the small luxury car battle Cadillac.

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