Cadillac Plans Entry-Level Luxury Sedan

Johan de Nysschen

Cadillac President Johan de Nysschen tells reporters the General Motors Co. unit will respond to the entry-level Audi A3 and Mercedes-Benz CLA small luxury sedans with a similar model of its own.

Both competing models are priced several thousand dollars below Cadillac's current entry-level car, the $35,000 ATS sedan. Demand for the ATS plunged 22% last year to 29,900 units, which was only about 2,500 units greater than the volume set in 2014 by the CLA.

The new Caddy will retain the company's rear-drive Alfa platform to help position the vehicle as a higher-performance option to the front-drive Audi and Mercedes models, de Nysschen says. He adds that the upcoming car also will feature a roomier back seat than the cramped one in the ATS.

The new sedan is part of a $12 billion product blitz at Cadillac that will put eight new models on the road by 2020 and add two more a few years after. Among the newcomers will be a big top-of-the-line sedan and three new crossovers to supplement the brand's SRX.