This year's auto show in Detroit could set the stage for a shake-up in the fiercely competitive — and hugely profitable — luxury car scene. That's because there's a new kid on the block, and its name is Cadillac.
The General Motors company says its new small, high-performance ATS will allow it to compete for the first time with Audi, Mercedes-Benz and BMW. But getting a brand-new luxury car like the ATS ready for market can be a grueling process.
Much as an athlete goes into training before a big race, the new Cadillac ATS went to the toughest racetrack in the world, the Nurburgring in Nurburg, Germany.
Chris Berube, lead development engineer for the ATS, describes the track as "treacherous" and even "infamous." He says that while they can still get a lot of testing done at the GM track in Milford, Mich., Nurburgring is the ultimate crucible. After all, with speeds sometimes exceeding 150 mph, Nurburgring only allows the industry's best drivers onto its track.
"You're operating the vehicle at very high speeds, very high lateral accelerations, and the guardrail is 2 feet off the pavement," Berube says. "So mistakes are costly."
And then there are the three spots on the track where the car goes completely airborne. Engineers dryly refer to what happens when the car lands as "full compression," or "wham."
Berube says people who buy a car like the ATS most likely won't test its limits the way they get tested at Nurburgring, but high performance is the cost of admission in the small-luxury-car arena. Customers won't even look at the ATS if they don't think it's as agile as the competition.
The Competition
If luxury-car makers like BMW are worried, they're not showing it. BMW is unveiling an update to its own small luxury car at this year's Detroit Auto Show. Its 3 Series is a direct competitor to the ATS — and one of the cars Cadillac used as a benchmark.
BMW North America President Ludwig Willisch says his company takes the competition seriously. But he isn't worried about the ATS yet; instead, he describes himself as "relaxed." That's because competitors have been trying to take BMW down for decades — and they've failed every time.
"Obviously, we [have been] the leader in that segment for years," he says. "We have a very sharp profile, because it is the ultimate driving machine."
'No One's Ever Said It's Going To Be Easy'
After Nurburgring, GM is pretty confident the ATS has a "silk glove" refinement that the competition lacks.
Aaron Bragman, an analyst with IHS Automotive, has seen the ATS but he hasn't driven it yet. "It basically is meant to go head to head with the best offerings from the German automakers," he says, "and, on paper at least, it seems that they've accomplished that."
Bragman says there's potential for the car to do well in the U.S. and a lot of potential for it to do well in China — the world's largest and fastest-growing car market. But he's highly skeptical the ATS can compete in Europe, BMW's home turf.
Joel Ewanick, head of global marketing for GM, says the company is serious about becoming a top global player in the luxury car market, and he insists it will happen — some day. Though he concedes, "I'm not going to say it's going to be easy. No one's ever said it's going to be easy."
Easy or not, the stakes are high for GM. Luxury cars like the ATS bring in more profit per car, much more than GM's small economy models like the Chevy Cruze. (Not surprising given that the Cruze costs around $17,000 and the ATS will cost at least twice that.)
Meanwhile, don't expect Cadillac's competitors to worry too much about the ATS ahead of its dealership debut this summer.
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