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Cadillac to fight Audi A3, Mercedes CLA with small rear-drive sedan?

Compact luxury sedans are fast becoming the trend among upscale automakers. Mercedes has the new CLA (and its many platform-mates), BMW has the 1 Series and 2 Series, Audi has the A3 and, though Lexus apparently isn't interested in anything smaller than its CT 200h, Infiniti is getting in on the action with a compact model of its own. It would only follow logically, then, that Cadillac should launch a competitor, and according to the latest reports, that's just what it has in store.
Speaking with Car and Driver, Cadillac marketing chief Uwe Ellinghaus confirmed that such a project is in the works. But unlike its rivals, Cadillac aims to go with a rear-wheel-drive layout. This despite research that apparently indicates that a surprising 80 percent of owners think that their BMW 1 Series is front-drive. It's the driving dynamics and styling proportions that motivate Ellinghaus and his colleagues to stick with rear-drive, however.
The new model would in all likelihood be based on the same GM Alpha architecture that underpins the ATS and CTS - a platform that has helped Cadillac keep the weight down on both models and which is expected to underpin the next-generation Chevy Camaro, as well. The sub-ATS could be positioned as a four-door 2+2, however, as the ATS grows a little larger in its next iteration in order to make room for its new baby brother.

Cadillac developing stretched ATS-L just for China

To luxury automakers, long-wheelbase sedans are to China that crossovers and SUVs are to the US, so it isn't all that surprising any more when the latest sedan gets an extra couple of inches between the wheels to improve rear-seat comfort. According to Car News China, the next sedan to get the stretch will be the Cadillac ATS, which will increase the wheelbase by 10 centimeters (about four inches) to become the ATS-L.
Designed to go up against rivals like the BMW 335Li and the added-length Mercedes C-Class, the ATS-L will reportedly be built locally in China with an engine list that will grow as well. Currently, only the 2.0-liter turbo engine is offered in the ATS in China, but the ATS-L will get the full spectrum of ATS engines including the base 2.5-liter and the peppier 3.6-liter V6. This isn't the first time Cadillac has offered a China-specific stretched sedan either as the SLS dates back to 2006.

A few signs that Cadillac's revival is taking hold

Only a flatworm would not have predicted the Cadillac ATS would help increase sales for America's erstwhile luxury brand of record; however, even the best automotive oracles didn't realize by how much: The ATS fueled a 49-percent increase of the brand's year-on-year sales in March, the sixth straight month of growth for Cadillac. The momentum helped push General Motors to post a 6.4-increase in sales in March versus 2012, leading its domestic competitors.
Dealership salesmen are among the first to register the shift occurring at Cadillac. A Texas dealer related an incident in which he helped a mother affix a baby seat in a car for a test drive, explaining that as opposed to the older buyers that are still a Cadillac mainstay he's getting "a pretty diverse group that's coming through the door now" who are "younger and better educated." Aided by incentives on the ATS, Cadillac's sales are up 38 percent so far this year, overtaking Acura as the fourth best selling luxury brand, and GM stock is benefiting with incremental gains because of it. Based on early response, the new 2014 Cadillac CTS should keep things going in the same direction.
The trend at the Wreath and Crest is part of a larger sales trend happening among domestics - with other models like the Dodge Dart and Ford Fusion doing well - and overall US car sales. Head over to Bloomberg for the big picture and role the ATS plays in it.